How to Calculate Accounts Receivable
Accounts receivable stem from a business providing a service or product to a person or business entity on credit. An account receivable is essentially a sale that a company has made but hasn't yet received the payment. In some cases, a company's accounts receivable can be quite high depending on the size of the company and the number of vendors that company does business with. Here is an easy way to calculate account receivable.
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Instructions
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Calculating Accounts Receivable
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Gather all accounts receivable information for the entire year. Your accounts should be broken down by vendor. In your sales ledger or journal, you should have accounts receivable totals for the month for each vendor.
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Add accounts receivable totals for each vendor you've billed during a particular month but haven't been paid. Perform this task for all your vendors in every calendar month. When you're done with this task, you should have an accounts receivable balance for each month of the year.
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Add your accounts receivable balance for all 12 months. If you have accounts receivable of $200 for all 12 months, your total accounts receivable for the entire year will equal $2,400.
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Divide your accounts receivable total for the year by 12, which represents the 12 months of the year. Your result will give you an accounts receivable average for the entire year. Using the previous example, dividing $2,400 by 12 months equals an average accounts receivable amount of $200 for the year.
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Tips & Warnings
When comparing accounts receivable across various companies, make sure that the companies use the same methods to calculate accounts receivable. Comparing accounts receivables of two different companies that use two different methods can lead to an inaccurate assessment of a company's assets.
