The terms are 30 days. The money arrives on day 68.

Most firms negotiate payment terms and chase overdue invoices. The largest recoverable delay usually sits somewhere neither of those touches.

By Steve 5 min read
Abstract bridge artwork for The terms are 30 days. The money arrives on day 68.

A business with 30-day terms and 68-day collections has a working capital problem that looks, from the outside, like a customer problem. The natural response is to chase harder, and if chasing doesn’t work, to negotiate shorter terms. Both can help at the margin. Neither addresses the part of the cycle where the delay usually accumulates, because that part sits inside the business rather than outside it, and it does not appear on the aged debtors report at all. The aged debtors report starts its clock on the invoice date.…

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