what is accounts receivable turnover 
accounts receivable represents the total dollar amount of unpaid customer invoices at any point in time assuming that credit sales are sales not immediately paid in cash the accounts receivable turnover formula is credit sales divided by average accounts receivable the average accounts receivable is simply the average of the beginning and ending accounts receivable balances for a particular period such as a month or year the accounts receivable turnover formula tells you how quickly you collect payments compared to your credit sales for example if credit sales for the month total 300 000 and the account receivable balance is 50 000 then the turnover rate is six the goal is to maximize sales minimize the receivable balance and generate a large turnover rate accounts payable turnover sales divided by average payables is a short term liquidity measure that measures the rate at which a company pays back its suppliers and vendors 