Accounts Receivable Days Calculator

The Accounts Receivable Days Calculator is a crucial financial tool that measures how long your business takes to collect payments from customers. This metric, also known as Days Sales Outstanding (DSO) or Days Receivable, is calculated by dividing accounts receivable by net credit sales, then multiplying by the number of days in the period (typically 365 for annual calculations).

Understanding your accounts receivable days helps you optimize cash flow management and improve collection efficiency. A lower DSO indicates faster collections, which improves cash flow and reduces the risk of bad debts. Conversely, a higher DSO suggests slower collections, which can strain cash flow and increase the likelihood of payment defaults.

This calculator is essential for business owners, financial managers, and accountants who need to analyze collection patterns, evaluate credit policies, and develop effective cash flow strategies. By monitoring your accounts receivable days over time, you can identify trends, benchmark against industry standards, and make informed decisions about credit terms and collection procedures.