The Complete Guide to Calculating and Improving Your Average Collection Period

You’ve made the sale and the invoice is out. Now all you need to do is wait to collect payment. The question is: how long will you be waiting, and will that help or hurt your cash flow?

The gap between making a sale and getting paid is an invisible yet debilitating problem. That gap is measured by your Average Collection Period (ACP), which tracks the average number of days it takes to collect payments from customers. A low ACP means you’re getting paid quickly, creating a stronger financial cushion. A high ACP means cash is tied up in unpaid invoices – obviously, not great for cash flow.