An accounts receivable turnover that is too high may indicate that credit is too tight,causing the loss of sales to good customers.

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A high accounts receivable turnover ratio indicates that a company collects its outstanding credit sales quickly. However, if the ratio is excessively high, it may suggest that the company's credit policies are too strict, potentially leading to lost sales opportunities with creditworthy customers who might require more lenient terms.

An Accounts Receivable Turnover That Is Too High May Indicate