The Accounts Receivable Turnover Ratio Formula is a crucial metric used to measure how efficiently a business collects its outstanding debts. It measures the number of times a company’s accounts receivables are collected and replaced in a given year—which gives you an indication of how well the company is managing its customer credit policies. To calculate this ratio, divide the total amount of accounts receivable into the total net sales for the same period. This will provide you with an accurate measurement of your company’s Accounts Receivable Turnover. Knowing your Accounts Receivable Turnover can help you keep better track of your customer payments, which in turn can help you make better informed financial decisions.