Days in A/R: What It Means and How to Bring It Down
Days in accounts receivable is the average number of days it takes to collect payment after a service is billed. It's a speed metric — not how much you collect, but how fast.
How to calculate it
Divide total accounts receivable by average daily charges, where average daily charges is total gross charges over a period divided by the number of days in that period.
What a good number looks like
As a general guide, under about 40 days is healthy, 40–50 is a watch zone, and consistently over 50 warrants investigation.
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A revenue assessment is a working session, not a sales call \u2014 we review your numbers and hand you the findings either way.