Average accounts receivable

It is the average amount of debtors or accounts receivable in a financial period. The average might be calculated by adding opening and ending balances of accounts receivable and then dividing by 2 or it might be calculated by taking the balance of different points of time ( e.g. 12 months) in a financial period and dividing by total number of point


Opening balance of debtors a/c + Ending balance of debtor a/c

OR on monthly basis

Debtor account balance at January 31 + Debtor account balance at February 28 + ....+...+....+.........

                                                         Number of months (say 12)