A Complete Guide to Average Collection Period Formula with Example
Emagia
MAY 16, 2023
For instance, if a corporation has a 20 day old $500,000 AR balance with an average collection period of 25, it can anticipate receiving payment within a week. Evaluate Credit Terms Typically, a low DSO is advantageous for businesses. The length of a company’s average collection period also indicates how severe its credit terms are.
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