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Business Accounts Receivable Days

February 28, 2017
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What it is, how it’s calculated, and why it’s important to small business owners.


Accounts Receivable Days = (Accounts Receivable ÷ Annual Revenue) × 365 Days


Accounts Receivable Days is the number of days until a company gets paid for its products or services. It is calculated by dividing Accounts Receivable (total money owed to the company) by Annual Revenue and then multiplying that by the number of days in a year.

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How it is Used

Accounts Receivable Days is useful in determining how well a business collects payments from its customers. Typically, businesses aim to decrease Accounts Receivable Days as a way of maximizing the amount of cash they have on hand at any given point in time.

Ways to Improve Accounts Receivable Days

A great way to improve Accounts Receivable Days is to offer different credit terms to different customers based upon the riskiness of their credit profile. Customers with riskier credit profiles should be asked to pay up front. Another way to improve Accounts Receivable Days is to selectively increase prices for products or services when possible. If done effectively, this can boost both cash flow and net profit margins.

To benchmark Accounts Receivable Days against others in your industry and learn how to generate more cash for your business, try our free cash flow solution, CashSage.

About the Author


Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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