Account Receivables Payment Delay Trends

Report on trends for account receivables average payment delay are not confidence inspiring. The average payment delay (the time it takes to settle payment on past due invoices) in the U.S. is 34 days for domestic account receivables and 45 days for foreign past due payments.

This isn’t that bad when you take into account only around 2.2% of all the account receivables value is likely to go uncollected. But here’s the part that worries me.

Between 2014 and 2015, when this survey by Atradius Payment Practices was conducted, there was an increase of 15 days in the tardiness of domestic payments. The foreign payment increase was almost 30 days. That means another month’s wait after the invoices were due to get paid.

The business owners in the survey were primarily citing bank lending restrictions, but potential reasons were all over the board. Either way, hopefully we aren’t seeing more of the same this year. But, just in case, now is a great time to consider reviewing the processes in your accounts receivable departments, particularly with automated invoice reminders.