Average Net Receivables Formula is an accounting technique used to measure the liquidity of a company by taking into account their receivables or money owed to them. It provides a snapshot of how well a company is managing its customers’ accounts receivable and their ability to collect payments from clientele. The formula is simply calculated by dividing the net receivables from the total amount payable in a period of time, usually one year. By doing so, companies can ensure they maintain a healthy cash flow, protect themselves from bad debt, and effectively operate their business.