Account receivable turnover, or “AR turnover,” is a key indicator of a business’s financial health. It measures how quickly a business can collect money owed by its customers and convert it into cash. AR turnover is calculated by dividing the total number of times an invoice has been sent to customers over a certain period of time by the average total amount of Accounts Receivables in that same period. This gives you an idea of how effectively and efficiently your company manages client payments. High AR turnover means that customers are paying on time and that your business is running smoothly. Low AR turnover could be an indication of late payments or unpaid invoices. Managing accounts receivable appropriately is essential for any business looking for success.