What is Accounts Receivable Turnover?

A definition of Accounts Receivable Turnover

“Accounts Receivable Turnover is a financial ratio that measures how efficiently a company collects its outstanding credit accounts. It indicates how many times a company’s receivables are converted to cash over a period.”

Accounts Receivable Turnover in Business Glossary - What is Accounts Receivable Turnover?

Business Glossary > What is Accounts Receivable Turnover?


Examples of Accounts Receivable Turnover in a Sentence:

Our company’s accounts receivable turnover improved this year, indicating better collection efficiency.

A low accounts receivable turnover may suggest problems in collecting payments.

The accounts receivable turnover ratio can help assess a company’s financial health.

Why is Accounts Receivable Turnover Important in Business?

Understanding accounts receivable turnover is critical as it impacts a company’s cash flow and operational efficiency. A higher turnover ratio indicates efficient collections, leading to better cash flow management and financial stability.

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Associated Terms

Here are some associated business terms and synonyms for “Accounts Receivable Turnover”:

  • Receivables Turnover
  • Debtor Turnover
  • Receivables Velocity

Coca-cola Accounts Receivable Turnover

Coca-cola closely monitors its accounts receivable turnover to maintain a healthy cash flow and ensure that its credit policies are effective. By consistently improving turnover rates, Coca-cola manages to optimize its collection process and sustain its operations efficiently.

Final Notes on Accounts Receivable Turnover

When considering accounts receivable turnover, businesses should focus on:

  • Ensuring effective collection policies
  • Monitoring cash flow performance
  • Identifying potential credit risks

A higher turnover ratio typically indicates efficient credit and collection processes.


This has been a definition of Accounts Receivable Turnover meaning.

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