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.

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We have made a concerted effort to minimize the average collection period of outstanding invoices to minimize the cost of factoring.

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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.

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average collected balance average contribution percentage