Accounts Receivable Turnover: A Comprehensive Guide for MSMEs
Accounts receivable turnover (ART) is a crucial metric that measures how efficiently a company collects its outstanding customer invoices. It indicates the number of times a company collects its average accounts receivable balance during a specific period. A high ART ratio generally signifies that the organisation effectively manages its credit policies and payment collection promptly, while a low ratio may indicate potential cash flow issues and credit risks.