Account receivable ratio (AR Ratio) is a financial metric that measures the amount of time it takes for customers to pay their invoices. It’s an important metric, as it can highlight potential problems with collections and provide insights into the performance of a business. To calculate this ratio, divide the total amount of accounts receivable by the total amount of sales over a given period. A high AR Ratio indicates that customers are taking longer to pay their invoices, which may cause cash flow issues. A lower AR Ratio tells us customers are paying timely, meaning the company is collecting its dues in a timely manner.