Average age of accounts receivable

Average age of accounts receivable

The weighted-average age of all the firm's outstanding invoices.

Average Age of Accounts Receivable

The total amount of time a company's accounts receivable have been uncollected divided by the number of outstanding invoices. For example, suppose a company has three outstanding invoices, one for 30 days, one for 40 days, and one for 90 days. Their average age is accounted as follows:

Average age of accounts receivable = (30 + 40 + 90) / 3 = 53.33 days
References in periodicals archive ?
3-7 day reduction in average age of accounts receivables days sales outstanding