why is the accounts receivable turnover ratio important 
the accounts receivable turnover ratio tells a company how efficiently its collection process is this is important because it directly correlates to how much cash a company may have on hand in addition to how much cash it may expect to receive in the short term by failing to monitor or manage its collection process a company may fail to receive payments or be inefficiently overseeing its cash management process the bottom linethe accounts receivable turnover ratio measures the number of times a company s accounts receivable balance is collected in a given period a high ratio means a company is doing better job at converting credit sales to cash however it is important to understand that factors influencing the ratio such as inconsistent accounts receivable balances may inadvertently impact the calculation of the ratio 