October 22nd, 2009 by Alex Coté
The good news: The vast majority of your customers and partners are paying their bills on time. The bad news: The delinquent minority is only getting worse.
Having access to the A/R activities of millions of businesses provides us with a unique view into the nation’s cash flow. And since the beginning of the year, we’ve been seeing a steadily improving trend in the amount of corporate accounts receivable debt that is current (see chart 1 below). In fact the vast majority of debt tends to be current – most companies simply pay their bills on time. Even at its worst in February of this year, on a national basis 81% of debt was current. Today that number stands at approximately 83%.
However, companies still must deal with the other 17% of businesses that fail to pay on time. While this number is not dramatically out of line, we’re seeing unsettling growth in the amount of debt over 90 days past due (see chart 2 below). This is not surprising given the well reported growth in amount accounts sent to collections agencies since the recession started, but it is causing finance staff and business owners to be more diligent and get more creative when it comes to dealing with a deadbeat drag.
Have you seen your 90+ days aging bucket growing? Please share a story or two on how you are dealing with this growing problem.
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[...] 28, 2009 — Cortera™, a community-driven business information company, today published its October 2009 Cortera’s High Risk Debt Report, a monthly index of current accounts receivable debt and high risk 90-plus days past due debt. The [...]