Average age of accounts receivable

Average age of accounts receivable

The weighted-average age of all the firm's outstanding invoices.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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
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