Accounts Receivable Collection Rate is a measure of how effective a business is at collecting its overdue payments. It is calculated by taking the total amount of accounts receivable at the end of the period, and dividing it by the total sales made during that same period. The higher the collection rate, the more effective the company is at collecting its due payments – which is essential for any business’s financial health. Collection rate also serves as an indicator of a business’s credit policy: businesses with higher collection rates can require customers to pay earlier in order to receive discounts. By having a proper handle on your accounts receivable, you can stay ahead of creditors and make sure your business remains financially healthy!