Average Collection Period Calculator

LAST UPDATE: September 24th, 2020


Definition – What is Average Collection Period?

Average collection period is a measurement of the number of days the firm takes to collect money owed.

Formula – How to calculate average collection period

Average Collection Period = (Accounts Receivables / Sales) x 365


A company has accounts receivable of $4,000 and net sales of $17,000.

Average Collection Period = ($4,000 / $17,000) x 365 = 0.2353 x 365 = 85.9

Therefore, this company’s average collection period is 85.9 days.

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