Receivables Collection Performance Calculator

How the receivables collection performance calculator works

Average receivables is (opening + reported ending receivables) ÷ 2. Turnover is period credit sales divided by that average. Implied collection days equals average receivables ÷ credit sales × period days. These are period-ratio estimates; zero credit sales gives undefined collection days and zero average gives undefined turnover.

Separately, the bridge ending balance is opening receivables + credit sales − cash collections − noncash reductions. The reported ending balance less that bridge is displayed as an unexplained difference. Money inputs round to cents first. Collections plus reductions cannot exceed opening balances plus credit sales in this reduced bridge.

Use compatible credit-sales, tax and receivable definitions. Avoid deducting a sales credit again as a noncash reduction when it is already netted from the sales input. A mismatch can reflect missing entries or classification differences, not necessarily an error. This is not an invoice-level ledger, collection effectiveness index, risk score or forecast.

Worked example

Opening receivables of 40,000 and reported ending receivables of 60,000 average 50,000. Credit sales of 300,000 give turnover of 6 and approximately 60.833 days over a 365-day period. The bridge 40,000 + 300,000 − 270,000 collections − 10,000 noncash reductions equals 60,000, so the difference is zero. At an entered ending balance of 80,000, days become 73 and the bridge difference becomes 20,000.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• CFI: receivables turnover, average balances and collection period