average collection period
Definition
The average time period for which receivables are outstanding. Equal to accounts receivable divided by average daily sales. also called collection ratio.
Use this term in a sentence
“ The average collection period was almost past and everything was going to be different for us, from then on out. ”
“ We have made a concerted effort to minimize the average collection period of outstanding invoices to minimize the cost of factoring. ”
“ After lowering the average collection period from 90 days to 60, we have been able to purchase newer inventory and see a profit with the decreased time of stock rotation. ”
