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The Knack To Getting Paid (Forbes.com)
May 5th, 2009
Glenn D. Porter
Forbes Magazine
It’s tough enough to get a purchase order in this recession–now you have to collect. I don’t have to tell you closers out there that salespeople don’t get their commission checks until the invoices are paid. Like it or not, that makes collections a sales function.
Welcome to accounts-receivable chicken. The name of this game for customers: Conserve as much cash as possible by not paying until the last possible moment–all the while use your vendor like a bank. As of December 2008, the average days-beyond-terms (a fancy phrase for the length of overdue payments) for the manufacturing, wholesale distribution and retail industries jumped to 11.7 days from 7.6 days just eight months earlier, according to data tracker Cortera.
And the later the payment, the more likely you’ll get stiffed. According to the Commercial Collection Agency Association, you can expect to collect 90% on every dollar of debt 30 days past due; that percentage plummets to 52% for receivables that have grown moss for six months.
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