What is Average Collection Period? In short, average collection period is the amount of time that elapses before an organization or company collects their accounts receivable (A/R) -- the payments that are owed from clients and customers. With proper average collection period monitoring and execution, organizations and businesses can help to ensure that they have enough liquid cash on hand to.
Late payments can negatively impact a business on multiple levels, from restricting growth to needing to turn to credit for operating costs. Dealing with late-paying customers is frustrating and time consuming - but it doesn’t have to be.
Business owners understand that cash is king and what having a regular cash flow means, from capital improvements to debt management. This is of course dependent on having an effective accounts receivable operation, which makes optimizing it critical to success.