A/R Collection Period Formula is a method used to calculate the total number of days it takes for a business to collect payments from its customers. In other words, it’s an indicator of how long it takes for your customers to pay on average. To figure out your A/R Collection Period, you will need three pieces of information: The average amount of receivables outstanding over a certain period, the total sales revenue during that period, and the total amount collected from customers in that same period. Put these three pieces of information together and you have the A/R Collection Period Formula – a simple but powerful tool to help your business monitor cash flow and ensure success.