The overdue receivables ratio is the percentage of your accounts receivable that is past its due date. You calculate it by dividing overdue receivables by total receivables, then multiplying by 100. It is a quick read on collection health: a low ratio means most customers pay on time, while a high or rising ratio signals collection problems or terms that are too loose.
It pairs well with days sales outstanding. DSO tells you how long collection takes on average; the overdue receivables ratio tells you how much of the ledger is already late right now.
Overdue AR / total AR.The share of your ledger that is already past due, as a percentage.
Lower is healthier.A rising ratio is an early sign collections are slipping.
Use it with DSO.DSO is collection speed; this ratio is how much is late right now.
Divide the value of invoices past their due date by your total outstanding receivables, then multiply by 100. Enter your figures to see the ratio.
As a rough benchmark, a healthy business keeps overdue receivables under about 15 to 25% of total receivables, and the older buckets (90 days plus) very small. There is no universal target: it varies by industry, customer mix and payment terms. What matters most is the trend and the aging profile. A ratio drifting upward, or a growing share sitting in the 60 and 90 day buckets, is the signal to tighten collections. An aging analysis shows where the overdue balance is concentrated, and days delinquent sales outstanding isolates just the late portion.
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