Accounts Receivable Turnover Calculator
Calculate your AR turnover ratio and days sales outstanding (DSO).
Measure how efficiently you collect payments from customers.
AR Turnover
AR Turnover Ratio measures how efficiently a company collects on credit sales.
AR Turnover = Net Credit Sales / Average Accounts Receivable
Days Sales Outstanding (DSO):
DSO = 365 / AR Turnover Ratio
DSO tells you the average number of days it takes to collect payment after a sale.
Average Accounts Receivable:
Average AR = (Beginning AR + Ending AR) / 2
DSO benchmarks by industry:
- Retail: 5–15 days
- Manufacturing: 30–50 days
- Professional services: 40–60 days
- Construction: 60–90 days
- Healthcare: 40–70 days
What the numbers mean:
- High turnover / low DSO: Fast collections — good cash flow
- Low turnover / high DSO: Slow collections — cash flow risk
- Industry comparison: Always compare within your sector
Example: $1,200,000 net credit sales, $150,000 average AR:
- Turnover: 8× per year
- DSO: 45.6 days average collection period