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What does the recovery rate of accounts receivable mean?
The recovery rate of accounts receivable refers to the ratio of accounts receivable recovered by enterprises to the amount and amount of accounts receivable in a certain period of time. Accounts receivable recovery rate = (accounts receivable recovery amount/accounts receivable occupation and amount) X 100%.

The calculation formula is as follows:

Accounts receivable recovery rate = (accounts receivable recovery amount/accounts receivable occupation and amount) × 100%

Among them, the recovery amount of accounts receivable is the credit amount of accounts receivable for the whole year MINUS the written-off bad debt loss;

The occupation and amount of accounts receivable are the sum of the balance of accounts receivable at the beginning of the year and the debit amount of accounts receivable throughout the year.

use

The recovery rate index of accounts receivable can truly and correctly reflect the realization speed of enterprise accounts receivable. Speeding up the recovery of accounts receivable, so that accounts receivable, which accounts for a large proportion of current assets, can be recovered in time, which can reduce the sluggish occupation of accounts receivable by liquidity, thus revitalizing the liquidity of enterprises and improving the efficiency of capital utilization.

The higher the index. Explain that customers pay in time, enterprises collect money quickly, and enterprises have strong liquidity and solvency; The bad debt losses of enterprises decreased, and the implementation of corporate credit policies was good. Moreover, through the calculation of this index, it can also indirectly reflect the scale of credit sales of enterprises.

Extended data:

The collection rate of accounts receivable, also known as the sales collection rate, is a financial term. It refers to the ratio of the sales amount paid by the enterprise to the total sales revenue. Generally used to measure the operating ability of enterprises. Establishing an effective terminal maintenance management method can not only reduce the business risk of dealers, ensure the payment safety of manufacturers, but also improve sales performance and payment recovery rate.

Sales collection rate = actual sales amount received/total sales revenue * 100%.

= (cash sales revenue+accounts receivable recovered this month)/total sales revenue * 100%

= [Total sales revenue-(closing number of accounts receivable-opening number of accounts receivable)]/Total sales revenue * 100%

When signing a sales contract with a distributor, we should pay attention to the following matters, so as to avoid business risks caused by differences with the distributor when dealing with accounts receivable in the future:

1. Specify various trading terms, such as price, payment method, payment date, transportation, etc.

2. Clarify the rights and responsibilities of both parties for breach of contract;

3. Determine the term of the contract and sign it after the end of the contract as appropriate;

4. Stamp the special seal for the dealer's contract (to avoid private seal or signature of personal behavior).