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The average collection period is the average number of days required to collect invoiced amounts from customers. The measure is used to determine the effectiveness of a company's credit granting policies and collection efforts.
The formula for the average collection period is:
Average accounts receivable / Annual sales ÷ days
Dear,
Please find the below details as per your request.
Average Collection Period= Average Accounts receivable/sales revenue x days
hi dear,
there is a formula to for collection and that is
total receivables or average receivable / total sales x days
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