AR Turnover Calculator
Collection efficiency and days-sales-outstanding.
AR turnover = Credit sales / Average AR. Higher is better—you collect faster. DSO (Days Sales Outstanding) = 365 / AR turnover. DSO of 30 means you wait ~30 days on average to get paid. This calculator helps you track collection efficiency.
Inputs
Results
AR turnover: 8.0x
DSO: 46 days
Insights
Formula
AR turnover = Credit sales / Avg AR DSO = 365 / AR turnover
Input Definitions
What does each input mean?
- Annual credit sales
- Total sales on credit (not cash) over the past 12 months. Exclude cash sales.
- Average AR balance
- Average accounts receivable balance. Use (beginning + ending AR) / 2 for the period.
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Are Your Customers Paying You Fast Enough?
Accounts receivable turnover measures how quickly you’re collecting money owed to you — and a slow AR cycle means your revenue is sitting on paper instead of in your bank account. For B2B businesses, slow collections are one of the most common causes of cash flow problems even when sales are strong. This calculator helps you measure your current collection efficiency and model what faster collections would be worth.
Use it when you want to understand the revenue impact of reducing your average days outstanding, when you’re deciding whether to offer early payment discounts to accelerate collections, or when you’re building a case for tightening credit terms with slow-paying customers. The cash value of improving AR turnover is often more impactful than any equivalent improvement in sales.