Average Accounts Receivable (AR) Formula is a financial statement which provides information about the overall receivables of a company and is used to calculate the average number of days that customer accounts remain open. The Average AR Formula takes into account the total amount of customer accounts receivable, the average daily balance of accounts, and the total sales for a given period of time. By using this formula, businesses can get an accurate measure of how long their customers take to pay off their debts, allowing them to anticipate cash flow issues and improve their overall receivables management.