average accounts receivable
How to Calculate Average Accounts Receivable. Use the balance sheet to find accounts receivable. Accounts receivable is the amount of money other people or companies owe you. Average accounts receivable looks at the accounts receivable balance at the beginning of the year as well as the end of the year. These numbers are on a company's balance sheet in the assets section.
For example, suppose that during the month of July, Company A made a total of $500,000 in credit sales and had $350,000 in accounts receivable. There are 31 days in July, so Company Aâs DSO for July can be calculated as: ($350,000 / $500,000) x 31 = 0.7 x 31 = 21.7.