{"id":8925,"date":"2024-04-08T07:04:48","date_gmt":"2024-04-08T11:04:48","guid":{"rendered":"https:\/\/www.sage.com\/en-ca\/blog\/?p=8925"},"modified":"2026-01-15T11:24:15","modified_gmt":"2026-01-15T16:24:15","slug":"accounts-receivable-turnover-ratio-how-to-calculate-it","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-ca\/blog\/accounts-receivable-turnover-ratio-how-to-calculate-it\/","title":{"rendered":"Accounts receivable turnover ratio: how to calculate it"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tAccounts receivable turnover ratio: how to calculate it\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2024-04-08T07:04:48-04:00\">April 8, 2024<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Accounts receivable turnover ratio: how to calculate it\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-ca\/blog\/accounts-receivable-turnover-ratio-how-to-calculate-it\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-ca\/blog\/author\/staceymcintosh\/\">\n\t\t\t\t<img decoding=\"async\" alt=\"\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2018\/11\/Stacey-McIntosh-350-1.jpg\" class=\"entry-author__image\" height=\"40\" width=\"40\" fetchpriority=\"high\" \/>\t\t\t\t<span class=\"entry-author__name\">Stacey McIntosh<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Unpaid invoices create problems for any small company by squeezing cash flow. So, how can you prevent this problem and allow your business to breathe? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The first step is to calculate your Accounts Receivable Turnover Ratio (ARTR). ARTR can also boost the long-term financial health of your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ARTR is a way to understand how quickly your customers are paying up. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A high ARTR means they\u2019re paying on time. If you\u2019re generating enough revenue and have spending under control, you should have the cash to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>cover costs<\/li>\n\n\n\n<li>make accurate forecasts<\/li>\n\n\n\n<li>strategize<\/li>\n\n\n\n<li>invest for growth.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A low ratio suggests your clients are taking too long to pay. This could be because of poor management or credit policies, or a riskier customer base. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your business can handle it, you may try setting a lower ratio deliberately to attract customers with better credit terms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, if there\u2019s a problem that goes unchecked, this could lead to bigger financial difficulties, such as inability to pay your staff or suppliers. It could also affect your creditworthiness or ability to attract investment. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you have a lower ARTR than you want, there are ways to fix it. To start, you need to make the right calculations to understand your receivable ratios. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These include your ARTR and average days-to-pay (also known as day ratio).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-here-s-what-we-cover-in-this-article\">Here\u2019s what we cover in this article:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"#what\">What is accounts receivable turnover ratio?<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"#important\">Why is accounts receivable turnover ratio important?<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#calculate\"><strong>How to calculate accounts receivable turnover ratio<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#interpret\"><strong>How to interpret your ratio<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#improve\"><strong>How to improve receivable and day ratios<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#final\"><strong>Final thoughts<\/strong><\/a><\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">New to Sage Accounting?<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p><!-- wp:paragraph --><\/p>\n<p class=\"\">Learn how each of our plans can give you greater control of your finances, save you time, simplify your work, and make the most of your data.\u00a0<\/p>\n<p><!-- \/wp:paragraph --><\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/sage-business-cloud\/accounting\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-10294\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Find out more<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1202446718-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1202446718-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what\"><strong>What is accounts receivable turnover ratio<\/strong>?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The ARTR measures, on average, how many times your company collects the money it\u2019s owed in a given period, such as a month, quarter, or year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Levon Galstyan, certified public accountant at Oak View Law Group, says: \u201cA high receivables turnover ratio means your company has good customers who pay their debts quickly. So, your company processes receivable balances faster and gets its hands on cashflow quicker. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You can use this positive cashflow to pay your bills on time, invest in growth and plan future investments and strategy.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cA low ARTR may indicate your company has a flawed collection process, lousy credit policies, or customers who aren\u2019t creditworthy. This may mean you cannot meet your financial obligations or invest in growth. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So, you may need to look at your credit policies to address this. For example, do you check the creditworthiness of your clients thoroughly?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read more: <a href=\"https:\/\/www.sage.com\/en-ca\/blog\/accounts-payable-vs-accounts-receivable-a-guide\/\" target=\"_blank\" rel=\"noreferrer noopener\">Accounts payable vs accounts receivable: a guide<\/a><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"important\">Why is accounts receivable turnover ratio important?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In financial modelling, the ARTR and day ratio are used in balance sheet forecasts, which lenders and investors use to analyze your company\u2019s financial health. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you have a low ARTR that you cannot address\u2013for example, if you are at the mercy of customers who cannot pay as quickly as you need\u2013this could affect your ability to attract finance. Or it may be why you need financing to bridge the gap.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tanya Taylor, founder and CEO at financial education platform Grow Your Wealth, says: \u201cAccounts receivable turnover ratio is instrumental in forecasting your cashflows.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;It also paints a picture of how effectively your business collects on its credit. For example, it can provide a good insight into your company\u2019s credit policy, whether your collection department is following up, and the quality of your customers.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A poor ar turnover ratio can indicate that you need to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>adjust your credit policy, <\/li>\n\n\n\n<li>make changes to your credit department, <\/li>\n\n\n\n<li>or change your existing customer base.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"> \u201cFor example, a company with a 45-day credit policy may be tying up its short-term cashflow and limiting how quickly it can replace its inventory without taking on debt,\u201d Tanya says.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt may also wind up with lots of bad debt on its books if these are low-quality customers; it does not have a strong collections department; or is unable to collect for some other reason.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cA company that wants to grow and or take on debt needs a strong credit policy, an effective collection department, and a good customer base that will pay their balances quickly. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These attributes contribute to a higher ARTR and lower payment days ratio, which is usually the ideal for an SME.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"calculate\"><strong>How to calculate accounts receivable turnover ratio<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">To work out ARTR, divide your net credit sales by average account receivables over a given period. So, the account receivable turnover ratio formula is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">net annual credit sales \/ average accounts receivables = ARTR<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Net credit sales are those made on credit terms\u2013for example, 30, or 45 days\u2013minus sales returns and allowances (discounts given due to problems such as late delivery).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Receivables are the balance of money owed to you for services or goods delivered but not yet paid for. The average receivables is the average amount your customers owed to you throughout the period.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Work this out by using the following receivables turnover formula example, adding the starting and closing receivables at the beginning and end of the period and divide this by 2:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A software company had the following financial standing for 2021:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>$100,000 net credit sales<\/li>\n\n\n\n<li>$20,000 accounts receivables on 1 January (the beginning of its financial year)<\/li>\n\n\n\n<li>$30,000 accounts receivables on 31 December (the end of its year).<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The average accounts receivable is $50,000\/2=$25,000. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ARTR is $100,000\/$25,000=4. This shows the software company collected its receivables 4 times on average in 2021.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Discover AutoEntry<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>AutoEntry helps small business owners and accountants reduce manual data entry, giving them more time to focus on what matters.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/accountants\/products\/autoentry\/\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\tid=\"cta-id-7125\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tdata-button-location=\"cta_box\"\n\t\t\t\t\t\t\t\t\t\t\t>Learn more about AutoEntry<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-557715883-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-557715883-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"interpret\"><strong>How to interpret your ratio<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">There is no standard good or bad figure, as it depends on the context. 3 ways to interpret this figure are to compare it to your company\u2019s previous ARTR figures, to competing firms in your sector, and to a sector average.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Take care when comparing with individual companies as each will have a different model and capital structure, which can greatly influence ratio calculations. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Try and choose one in your sector with a similar size and model.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tanya says you can make sense of ARTR further by using it to calculate the day ratio, which is how many days it takes your customers to pay their invoices on average.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-day-ratio-example\">Day ratio example<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">She gives an example of small firm Maria\u2019s Bakery, which has expanded its customer base by extending credit to small business owners. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the end of the first year doing this, the company\u2019s ARTR was 8.2\u2013meaning it gathered its receivables 8.2 times for the year on average.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bakery can calculate the day ratio by dividing the number of days in the year (365) by the ARTR. In Maria\u2019s case, this is 365\/8.2 = 44.5, which means it takes her just under 45 days to collect from customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tanya says if the company has a 45-day payment policy, customers are paying within the terms and the system is running smoothly. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If it still has cashflow problems, it may need to reduce its payment term.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, if Maria\u2019s policy requires invoices to be paid in 30 days, a 44.5 day ratio could indicate it is extending credit to lower quality customers, or its collection department is not effective.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bakery could compare this ratio to industry peers to see if it\u2019s an outlier, Tanya says. \u201cIf similar businesses have a lower day ratio\u2013say 40\u2013Maria\u2019s Bakery could consider how to improve its ratios to make the business more competitive.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Read more: <a href=\"https:\/\/www.sage.com\/en-ca\/blog\/performance-metrics-business-decisions-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">How to use the right performance metrics to make business decisions<\/a><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"improve\"><strong>How to improve receivable and day ratios<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Though a high ARTR is usually desirable, you must strike a balance. If your credit policy is too strict, it may drive some customers away, especially in tough economic times.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some well-run businesses extended their payment terms to customers during the pandemic, for example. Or if a close competitor offers customers better credit terms, you may have to do the same to compete. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s a good idea to build some capacity to extend terms into your model and allow it to cope with such challenges.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To improve your ar turnover ratio, make sure you invoice regularly and accurately.&nbsp;<a href=\"https:\/\/www.sage.com\/en-ca\/sage-business-cloud\/accounting\/features\/invoicing\/\" target=\"_blank\" rel=\"noreferrer noopener\">Cloud-based accounting software<\/a>&nbsp;can automate this task to help you invoice efficiently and minimize errors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consider making life easier for customers by offering multiple ways to pay. Or you could ask for down payments, or bill clients in advance. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Do not wait until invoices are long overdue\u2013chase earlier, and more regularly. Instead, If clients still doesn\u2019t pay, have a clear escalation process and stick to it.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tracking invoices and receivables ratios automatically in your&nbsp;<a href=\"https:\/\/www.sage.com\/en-us\/size\/small-business\/?utm_medium=paidsearch&amp;utm_source=google&amp;utm_campaign=UK%7cGoogle%7cAccounting%7cBrand_MainSage-MainVariation%28E%29_ACGRC_&amp;ppc_keyword=sage%20accounting%20software&amp;ds_rl=1288210&amp;ds_rl=1294005&amp;ds_rl=1294005&amp;ds_rl=1288210&amp;gclid=CjwKCAjw7p6aBhBiEiwA83fGumi4OnDVyHm7UV5zMgJFFHKkGgNFfp-KE0Hhnj0Lhjsmlh9f_leTTRoC7VAQAvD_BwE&amp;gclsrc=aw.ds\" target=\"_blank\" rel=\"noreferrer noopener\">accounting software<\/a>&nbsp;will ease many of these tasks. For example, by providing a dashboard and sending reminder emails to tardy clients automatically.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"final\"><strong>Final thoughts<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Keeping on top of your <a href=\"https:\/\/www.sage.com\/en-ca\/accounting-software\/accounts-receivable\/\" target=\"_blank\" rel=\"noreferrer noopener\">accounts receivable<\/a> is critical to managing cashflow and enabling your business to grow.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Proactivity and persistence in chasing debts will reap benefits\u2013and accounting software takes the pain out of this process.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The resulting improvements in financial health can boost your efficiency, profitability, financial standing, and the ultimate success of your business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Editor\u2019s note: This article was first published in January 2023 and has been updated for relevance.<\/em><\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p class=\"cta-content__title\">Get a roundup of our best business advice in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-8949a954-88b2-43bb-8b8a-77c53eb34350\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/tag\/accounting-101\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting 101\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-14929 post type-post status-publish format-standard has-post-thumbnail hentry category-accountants category-money-matters category-people-leadership tag-accounting-101 tag-bookkeeping tag-business-finances tag-business-management tag-cash-flow tag-cfo tag-data-analysis tag-electronic-payments tag-financial-insights business_type-small-business business_type-medium-business business_type-accountants card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1271694534-1440x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1271694534-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1271694534-768x432.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1271694534-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T07:00:54-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">10 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/outstanding-cheques-bank-reconciliation\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tWhat are outstanding cheques in bank reconciliation?\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tOutstanding cheques can make your bank balance look higher than the cash you actually have available. Learn how to identify and calculate them, reconcile your accounts accurately, and handle stale-dated cheques in Canada.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-14917 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters tag-accounting-101 tag-cash-flow tag-data-analysis tag-financial-insights business_type-small-business business_type-medium-business business_type-accountants industry-financial-services\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/cash-on-cash-return\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0905-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0905-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0905-768x512.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0905-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-08-17T06:19:31-04:00\">August 17, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">13 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tCash on cash return: Definition, formula, and example\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-14634 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accounting-101 tag-business-strategy tag-financial-insights tag-investments business_type-small-business business_type-medium-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/net-asset-value\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-768x512.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0465-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-07-03T08:20:26-04:00\">July 3, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">11 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tNAV meaning: net asset value formula and examples\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-14436 post type-post status-publish format-standard has-post-thumbnail hentry category-strategy-legal-operations tag-accounting-101 tag-cloud-technology business_type-small-business business_type-medium-business business_type-accountants industry-professional-services\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/transform-professional-services-profitability\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1178687924-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1178687924-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1178687924-768x432.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/04\/GettyImages-1178687924-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-03-04T09:30:54-05:00\">March 4, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">3 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tTransform your professional services firm with this game-changer for profitability\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-13703 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-technology-innovation tag-accounting-101 tag-ai tag-bookkeeping tag-business-intelligence tag-business-management tag-cloud-financial-management tag-cloud-technology tag-digital-transformation tag-entrepreneurship tag-how-to-grow-your-business tag-small-business tag-tax tag-workplace-technology business_type-small-business business_type-accountants\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-ca\/blog\/accounting-automation-tools-guide-for-accountants-and-bookkeepers\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0678-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0678-684x384.jpg 684w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0678-768x512.jpg 768w, https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2024\/10\/BrandShoot-LND_June2024_Financial-Services_0678-1214x810.jpg 1214w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-01-27T13:50:48-05:00\">January 27, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">9 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tAccounting automation tools: The  ultimate guide for accountants and bookkeepers\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Accounts receivable turnover ratio indicates the health of your company. Learn how to calculate it using examples and interpret the results.<\/p>\n","protected":false},"author":346,"featured_media":8929,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_is_cornerstone":"","_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_opengraph-title":"","_yoast_wpseo_opengraph-description":"","_yoast_wpseo_opengraph-image":"","_yoast_wpseo_opengraph-image-id":"","_yoast_wpseo_twitter-title":"","_yoast_wpseo_twitter-description":"","_yoast_wpseo_twitter-image":"","_yoast_wpseo_twitter-image-id":"","_yoast_wpseo_schema_page_type":"","_yoast_wpseo_schema_article_type":"","_sage_video":false,"_yoast_wpseo_focuskeywords":"[{\"keyword\":\"ARTR\",\"score\":67},{\"keyword\":\"unpaid invoices\",\"score\":69}]","_yoast_wpseo_keywordsynonyms":"[\"\",\"\",\"\"]","_yoast_wpseo_primary_category":"7","post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[7],"tags":[162],"business_type":[6],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[34],"coauthors":[317],"class_list":["post-8925","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","business_type-accountants"],"sage_meta":{"region":"en-ca","author_name":"Stacey McIntosh","featured_image":"https:\/\/www.sage.com\/en-ca\/blog\/wp-content\/uploads\/sites\/12\/2022\/12\/GettyImages-1325244864-708x708-1.jpg","imagine_tags":{"34":"Accountants"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice Canada English","distributor_original_site_url":"https:\/\/www.sage.com\/en-ca\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/8925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/users\/346"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/comments?post=8925"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/posts\/8925\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media\/8929"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/media?parent=8925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/categories?post=8925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/tags?post=8925"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/business_type?post=8925"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/lilypad?post=8925"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/context?post=8925"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/industry?post=8925"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/persona?post=8925"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/imagine_tag?post=8925"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-ca\/blog\/api\/wp\/v2\/coauthors?post=8925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}