Accounts receivable turnover calculation is a metric used to measure the effectiveness of a company’s credit policies and collections activities. It’s calculated by taking net sales for a given period, and dividing it by the average amount of accounts receivable during that same period. By calculating this ratio over time, companies can get an understanding of whether its customers are paying their invoices on time or not. A high accounts receivable turnover will signify that there’s efficient collections and faster payments to the company, while a low number would indicate people may be slow in paying them. With accounts receivable turnover, companies can get an accurate picture of how effective they are at collecting payments from their clients and make necessary changes if needed.