The Days Sales in Average Receivables Formula is a commonly used financial metric that measures the average number of days it takes for a business to collect payments from its customers. It is used as a way to gauge the efficiency and effectiveness of a company’s credit management policy and operations. By calculating Days Sales In Average Receivables (or DSAR), you can get an estimate of how quickly customers are paying their debts – and how efficiently your company is managing receivables. A higher DSAR usually indicates a healthier cash flow, while a lower one suggests that your company is collecting payments slower than expected. So, by understanding your DSAR, you can make sure that your receivables department is running at its most effective level.