![]() The accounts receivable turnover is used to analyze how effective a company’s revenue collection is, and that’s why it’s important. We’ll understand this in depth in the following sections. But if the customers are paying back within the policy time, the ratio is high, thereby contributing to a good accounts receivable turnover.Ī good accounts receivable turnover means that a business has a solid credit policy, an excellent due collection process, and a record of exceptional customers who pay their dues on time. With a 30-day payment policy, if the customers take 46 days to pay back, the Accounts Receivable Turnover is low. For instance, let’s talk about Company A’s payment policy itself.
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