Average Collection Period Calculator
Measure how long it takes to collect receivables after a credit sale. This calculator supports two approaches: using average accounts receivable and credit sales, or using a receivables turnover ratio. Add your credit terms to see whether collections are on track.
Last updated: January 2026
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Converted duration: 365 days
Results
Average collection period
91.25 days
ACP = AR × Days ÷ Total credit sales
Duration (days)
365
Benchmark vs credit terms
+61.25 days (ACP − terms)
Average daily credit sales
$274 per day
Exceeds credit terms
Why Average Collection Period Matters
Use it to
Spot slow-paying patterns
Benchmark
ACP vs terms
Connect it to
Cash flow forecasts
Quick Example
With average receivables of $25,000 and annual credit sales of $100,000:
How to Calculate Average Collection Period
Average collection period is a receivables-focused time metric: it answers “how many days, on average, does it take us to turn credit sales into cash?” It’s most useful when you compute it consistently each month/quarter and track the trend.
Two common formulas
ACP = (Average AR × Days) ÷ Total credit salesACP = Days ÷ Receivables turnoverBoth approaches should agree when the inputs are consistent (same period, same definition of credit sales).
Practical tips
- Use the same duration for all inputs (e.g. yearly sales with 365 days).
- If you only have total sales, treat ACP as an approximation and document the assumption.
- Segment by customer or invoice aging to find what drives the average.
- Compare ACP to credit terms to see whether collections lag behind policy.
Frequently Asked Questions
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Share it with finance teams tracking receivables and working capital.
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