# Time to Collect (TTC)

> Time to collect is the average days from invoice to cash received, the plain-language twin of days sales outstanding.

Source: https://www.paidnice.com/dictionary/time-to-collect
Publisher: Paidnice
Part of: Accounts Receivable Dictionary, https://www.paidnice.com/dictionary

---

## What is time to collect (TTC)?

**TTC stands for Time to Collect. It is the average number of days a business takes to turn an invoice into cash, measured from the invoice date to the date payment is received.** A lower TTC means you are collecting faster, which frees up cash; a rising TTC is an early warning that collections are slipping. It is closely related to days sales outstanding (DSO), which is the standard term for the same idea.

Teams track TTC to judge how well their credit terms and collection process are working, and to spot trouble before it shows up in the bank balance.

### Key takeaways

- **TTC = Time to Collect.** The average days from invoice to payment received.
- **Lower is better.** A shorter TTC means faster cash and a healthier collections process.
- **Close cousin of DSO.** Days sales outstanding is the standard term for the same measure.

## How to calculate time to collect

Divide your average accounts receivable by total credit sales for the period, then multiply by the number of days in that period.

```
Time to collect = (average accounts receivable / total credit sales) x days in period
```

For example, 60,000 average AR divided by 600,000 credit sales, times 365 days, gives a time to collect of 36.5 days. An interactive calculator for this is on the page.

Because the maths is the same as days sales outstanding, you can use the [DSO calculator](https://www.paidnice.com/calculators/days-sales-outstanding) for a fuller breakdown, and compare it with the [average collection period](https://www.paidnice.com/dictionary/average-collection-period).

## What is a good time to collect?

A healthy TTC is usually within about 15 days of your stated payment terms; on net 30 terms, a TTC under roughly 45 days is generally considered good. The right target depends on your industry and terms, so track the trend rather than a single number: a TTC that is creeping up period on period matters more than the absolute figure. To pull TTC down, tighten terms, invoice promptly and automate reminders and escalations.

## Frequently asked questions

**What does TTC mean?**
TTC stands for Time to Collect. It is the average number of days a business takes to turn an invoice into cash, measured from the invoice date to the date payment is received. A lower TTC means faster collections and better cash flow.

**What is the full form of TTC in finance?**
In accounts receivable and finance, TTC is the full form of Time to Collect, the average days taken to collect payment on invoices. It is closely related to days sales outstanding (DSO).

**How do you calculate time to collect?**
Divide average accounts receivable by total credit sales for the period, then multiply by the number of days in the period. For example, 60,000 average AR divided by 600,000 credit sales, times 365 days, gives a time to collect of 36.5 days.

**What is the difference between TTC and DSO?**
They measure the same thing: the average time to collect receivables. Days sales outstanding (DSO) is the standard, widely reported term, while time to collect (TTC) is a plainer label for the same metric and calculation.

## Related

- [DSO calculator](https://www.paidnice.com/calculators/days-sales-outstanding): the standard way to measure collection speed.
- [Average collection period](https://www.paidnice.com/dictionary/average-collection-period): a related view of the same metric.
- [AR insights and reporting](https://www.paidnice.com/accounts-receivable-reporting): track TTC and DSO automatically.