# How To Calculate Accounts Receivable Turnover in Flexi | Arithmix

Learn how to calculate accounts receivable turnover in Flexi with our step-by-step guide. Improve your financial management skills and optimize your business operations today.

Calculating accounts receivable turnover is an important aspect of financial management for any business. It helps you understand how efficiently your company is collecting payments from customers and managing its cash flow. In this article, we'll explain what accounts receivable turnover is, when it's valuable to calculate it, and how to calculate it using Flexi.

## What Is Accounts Receivable Turnover?

Accounts receivable turnover is a financial ratio that measures how many times a company collects its average accounts receivable balance during a specific period. In other words, it shows how quickly a company is converting its outstanding invoices into cash. The formula for accounts receivable turnover is:

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

Net credit sales refer to the total amount of sales made on credit during the period, while average accounts receivable is the average balance of outstanding invoices during the same period. A high accounts receivable turnover ratio indicates that a company is collecting payments quickly, while a low ratio suggests that it's taking longer to collect payments.

## When Is It Valuable To Calculate Accounts Receivable Turnover?

Calculating accounts receivable turnover is valuable in several situations. For example, it can help you:

• Identify potential cash flow issues: If your accounts receivable turnover ratio is decreasing over time, it could indicate that your customers are taking longer to pay their invoices, which could lead to cash flow problems.
• Assess credit policies: If your accounts receivable turnover ratio is low, it could suggest that your credit policies are too lenient, and you need to tighten them to reduce the risk of bad debt.
• Compare performance: Comparing your accounts receivable turnover ratio to industry benchmarks or competitors can help you understand how your company is performing relative to others in your industry.

## How to Calculate Accounts Receivable Turnover in Flexi

To calculate accounts receivable turnover using Flexi, you'll need to follow these steps:

1. Open Flexi and navigate to the financial statements section.
2. Select the period for which you want to calculate accounts receivable turnover.
3. Find the net credit sales figure for the period. This can be found on the income statement.
4. Find the average accounts receivable balance for the period. This can be calculated by adding the beginning and ending accounts receivable balances for the period and dividing by two.
5. Use the formula mentioned earlier to calculate the accounts receivable turnover ratio.

By following these steps, you can easily calculate your accounts receivable turnover ratio using Flexi. Remember that this ratio is just one of many financial metrics that you should monitor to ensure the financial health of your business.

## How Do You Calculate Accounts Receivable Turnover in Flexi

Flexi itself isn’t naturally geared towards letting you calculate complex metrics like Accounts Receivable Turnover. As an alternative, teams typically use products like Arithmix to import data from Flexi and build out dashboards.

## What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Flexi, combine it with data from other systems, and create calculations like Accounts Receivable Turnover.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.