when analyzing average collection period be mindful of the seasonality of the accounts receivable balances for example analyzing a peak month to a slow month by result in a very inconsistent average accounts receivable balance that may skew the calculated amount 
average collection period also relies on net credit sales for a period this metric should exclude cash sales as those are not made on credit and therefore do not have a collection period in addition to being limited to only credit sales net credit sales exclude residual transactions that impact and often reduce sales amounts this includes any discounts awarded to customers product recalls or returns or items re issued under warranty 