By Mike Seemuth
Businesses in the state are continuing to report high accounts receivable delinquencies, but there are signs of improvement.
Florida businesses reported that 18.22 percent of their receivables were past due in April, higher than the national average of 15.67 percent, commercial credit bureau Cortera reported in a monthly survey.
Cortera, with offices in Boca Raton and Quincy, Massachusetts, said the past-due portion of Florida business receivables in April was the eighth-highest among the 50 states.
Businesses that carry a large volume of accounts receivable “kind of become a bank for their customers,” said Alex Cote, vice president of marketing of Cortera. Restricting customer credit can minimize bad-debt losses, but “if you’re too tight, you’re not going to have enough sales. So you have to be willing to take some risk in the market.”
Florida businesses may have to write off a relatively high percentage of their oldest receivables. Cortera reported that the portion of Florida business receivables that were 90 days or more delinquent was 9.55 percent in April, second-highest among the 50 states, and had been above 9 percent since September 2009.
But the general trend in doubtful accounts has been on the decline in the Sunshine State, Cortera data show.
The 18.22 percent of Florida receivables past due in April was just a bit higher than the comparable 17.91 percent level in April 2009 and well below the peak level of last year, 20.66 percent in September 2009.
Accounts receivable tend to rise and fall along with revenue at most companies. But some companies are collecting more revenue while reducing their investment in receivables, freeing up capital for other business purposes.
Among 12 large public companies in South Florida that disclose reserves for doubtful accounts in regulatory filings, eight not only reduced the size of such reserves during the first quarter but also collected more revenue in the quarter than in the same period last year, according to Securities and Exchange Commission filings.