The time, expressed in days, weeks, or months, that it takes to obtain payment of a debt by a customer.
The receivables turnover ratio measures how efficiently a company collects its average accounts receivable over a specific period. It indicates the number of times average accounts receivable are collected in a year.
The Trade Receivables Collection Period refers to the time given to customers to pay their accounts, which is typically 30 days. However, late payments can occur and may affect cash flow significantly.
