Measures the time taken to collect payment after a sale.
What it Measures ?
How long customers take to pay us.
Relevant StakeHolders
AR Team, Sales Finance
In-depth Use Case / Real-world Example
Accounts Receivable Turnaround Time is the average number of days it takes for a company to collect payment from customers after a sale has been made. For example, if a company’s average accounts receivable is ₹300,000 and the total credit sales amount to ₹1,200,000 annually, the turnaround time would be approximately 90 days. Shortening this time is essential for maintaining liquidity and reducing bad debt. Efficient collection processes are critical to ensuring a company has adequate cash flow for its operations.
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