BNET Business Dictionary
Business Definition for: Accounts Receivable Turnover
- a ratio that shows how long the customers of a business wait before paying what they owe. This can cause cash flow problems for small businesses.
Example: The formula for accounts receivable turnover is straightforward. Simply divide the average amount of receivables into annual credit sales:Sales / Receivables = Receivables turnoverIf, for example, a company's sales are $4.5 million and its average receivables are $375,000, its receivables turnover is:4,500,000 / 375,000 = 12A high turnover figure is desirable, because it indicates that a company collects revenues effectively, and that its customers pay bills promptly. A high figure also suggests that a firm's credit and collection policies are sound.
In addition, the measurement is a reasonably good indicator of cash flow, and of overall operating efficiency.
Additional Resources
- Accounts Receivable
- Accounts receivable are unpaid customer invoices, and any other money owed to the organization by customers. The sum of all customer accounts receivable is listed as a current asset on balance sheet. The accounts receivable ledger, which can also double as a customer statement, is a record of each...
- White papers 2003-01-01
- Assignment Of Accounts Receivable (No Recourse)
- This is template for assignment of accounts receivable. Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company or organization for goods and services that have been provided to the customer.
- Tools & templates 2007-12-01
- Accounts Receivable And Inventory Management
- Accounts receivable is the net monetary value realized by an organization through sales. The parameters affecting accounts receivable management include level of sales, terms of sales, and quality of customer. Efferent inventory management is imperative for reducing wastage in the production process. The paper examines the basics of accounts receivable...
- Presentations 2003-01-01
- Assignment Of Accounts Receivable (With Recourse)
- This is template for assignment of accounts receivable with recourse. Accounts receivable is one of a series of accounting transactions dealing with the billing of customers who owe money to a person, company, or organization for goods and services that have been provided to the customer.
- Tools & templates 2007-12-01
- Aging Of Accounts Receivable
- This is the companion form to Aging of Accounts Payable. Use it to keep track of the age of your accounts receivable and to help you identify accounts in need of further collection activities.
- Tools & templates 2005-08-02
- Accounts Receivable and Cash Flow
- Accounts receivable represent sales that have not yet been collected as cash. It explains that merchandise or services in exchange for a customer's promise to pay at a certain time in the future. If the business normally extends credit to its customers, then the payment of accounts receivable...
- White papers 2003-01-01
- Accounts Receivable Financing
- This paper discusses about the accounts receivable financing. As a business owner one needs ways to keep up with growth and meet increasing cash needs. The accounts receivable financing program offered by Sovereign Funding Group SFG lets the owner to establish a revolving credit line secured by receivables with advance...
- White papers
- Accounts Receivable Clerk
- The Accounts Receivable Clerk job description template includes the following job summary: To perform tasks required for an accurate Accounts Receivable System. Additional information available includes essential job functions, additional responsibilities, and education and experience requirements.
- Tools & templates 2008-11-01
- Accounts Receivable Aging
- Use this template to organize a company's current and past due accounts according to how long they have been outstanding. It can be used on paper or filled in electronically. Because many businesses maintain their accounts receivable in a database, you may wish to use file-linking formulas to reference the...
- Tools & templates 2007-09-01
- Accounts Receivable Clerk Job Description
- The Accounts Receivable Clerk job description template includes the following job summary: To perform tasks required for an accurate Accounts Receivable System Additional information available includes essential job functions, additional responsibilities, and education and experience requirements.
- Tools & templates 2007-09-09
- Supervisor, Accounts Receivable/Billing
- The Supervisor, Accounts Receivable/Billing job description template includes the following job summary: To supervise the billing and accounts receivable department in the recording and collection of customer invoices to ensure prompt processing and payment. Additional information available includes essential job functions, additional responsibilities, and education and experience requirements.
- Tools & templates 2008-11-01
- Aged Accounts Receivable Report
- This template assists accounting teams in tracking and recording all accounts receivable. It helps the user manage the cash collections process and foresee potential problems with each customer that is using terms to pay.
- Tools & templates 2004-04-19
- Factoring: Converting Accounts Receivables Into Capital
- It has been observed that keeping the cash flowing is a challenge for all businesses. As every business owner knows, sales alone do not measure the profitability of a company. The solutions may be Accounts Receivable Funding provided through Diversified Funding Services, Inc. Accounts Receivable Factoring is quickly becoming a...
- White papers 2003-10-01
- Supervisor, Accounts Receivable/Billing Job Description
- The Supervisor, Accounts Receivable/Billing job description template includes the following job summary: To supervise the billing and accounts receivable department in the recording and collection of customer invoices to ensure prompt processing and payment. Additional information available includes essential job functions, additional responsibilities, and education and experience requirements.
- Tools & templates 2007-09-09
- Credit And Accounts Receivable Management
- When a sale is made, an organization receives money. Accounts receivable management encompasses the collection and processing activities of the aforesaid money. The organization, from time to time, due to pressure posed by competition or otherwise, resorts to offering credit to buyers. The formulation and operationalization of credit policies and...
- Presentations 2003-01-01
- Accounts Receivable Management
- Numbers and technology don't drive accounts receivable and payable processes. People do. A patient's experience related to charges - something that may happen once in a lifetime - is an indelible experience that fundamentally affects the financial survival of payers and providers. Accounts receivable is an information-dependent process that can...
- White papers 2004-06-29
- Activity Ratios
- Use this template to calculate a firm's activity ratios; such as inventory turnover, average collection period, and fixed asset turnover. Activity ratios help to measure a company's efficiency managing certain assets such as: inventory, accounts receivable, and also long-term and total assets.
- Tools & templates 2007-09-01
- Components of the Accounting System
- Accounting system is mainly considered as a wheel whose hub is the general ledger (G/L). These include Accounts receivable, Accounts payable, Order entry etc. These modules are ledgers themselves. We call them subledgers. Each contains the detailed entries of its specific field, such as accounts receivable. If you are just...
- White papers 2003-01-01
- IVAX Diagnostics Announces Collection of Significant Accounts Receivable; Reports Preliminary First Quarter Results
- MIAMI -- IVAX Diagnostics, Inc. (AMEX:IVD) today reported that it received a payment of approximately 2 million Euro from a governmental region in Italy in satisfaction of previously outstanding accounts receivable balances from hospitals located in the region. A significant portion of this payment relates to accounts receivable against which...
- Research articles 2005-05-16
- Accounts Receivable, Trade Debt and Reorganization
- The focus of this article is on the management of working capital as accounts receivable and trade debts are the part of the working capital. If a company is sound with working capital the bankruptcy chances are very less for that company. The optimal outcome of a firm in bankruptcy...
- White papers 2000-07-01
