Collection fractions

Collection fractions

The percentage of a given month's sales collected during the month of sale and each month following the month of sale.

Collection Fraction

The percentage of accounts receivable for a month collected in a given month. For example, a small business may have $20,000 in sales for the month of July. If it collects $10,000 in July, $5,000 in August, and $2,500 each in September and October, the collection fractions for July's sales are 50% in July, 25% in August, and 12.5% in September and October.
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