Receivable Days on Hand Calculator
Receivable days on hand (DOH) is a crucial metric in finance, measuring the average number of days it takes for a company to collect its receivables. Understanding DOH helps businesses manage their cash flow, set credit terms, and assess their collection efficiency.
- Enter the total accounts receivable at the end of the period.
- Enter the total credit sales for the period.
- Enter the number of days in the period (e.g., 30 for a month).
- Click ‘Calculate’ to see your receivable days on hand and a visual representation.
The formula for receivable days on hand is:
DOH = (Accounts Receivable / Credit Sales) * Days in Period
Our calculator uses this formula to provide an accurate DOH calculation.
Real-World Examples
Company A: AR: $500,000, Credit Sales: $3,000,000, Days: 30
DOH = ($500,000 / $3,000,000) * 30 = 50 days
Company B: AR: $800,000, Credit Sales: $5,000,000, Days: 30
DOH = ($800,000 / $5,000,000) * 30 = 48 days
Company C: AR: $350,000, Credit Sales: $2,500,000, Days: 30
DOH = ($350,000 / $2,500,000) * 30 = 42 days
Comparison of Receivable Days on Hand
| Company | DOH |
|---|---|
| Company A | 50 days |
| Company B | 48 days |
| Company C | 42 days |
Expert Tips
- Regularly review and update your DOH to optimize your collection strategy.
- Consider offering discounts for early payments to reduce DOH.
- Monitor your DOH trend over time to identify any potential issues.
What is a good receivable days on hand?
A good DOH varies by industry, but generally, lower DOH indicates more efficient collections.
How can I improve my receivable days on hand?
Improve collections, offer discounts for early payments, and monitor your DOH regularly.