Can anyone give me the equation/components you are measuring to get your average days delinquent on accounts? This is something we are now looking at in addition to DSO and I was interested to see how other businesses were measuring it.
CMA Community
Sponsored by Credit Management Association
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Posted 6 months ago #
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Because of the mulitplicity of terms that we (and others) have, we use the DSO to determine days late, comparing it to our terms for that account. DSO is a standard accounting measure, and has more of a bearing on our accounting figures, so we don't usually use average days late.
When determining it for a single customer, we do the following. If a customer is due, say, on the 10th of every month, but doesn't pay on average until, say, 57 days out, then we eyeball it, and take the average of how long they have to pay. For example, the above company might have Net 10th Prox would be 40 days at the most, and ten days at the least, for a thirty-day month. That's an average of twenty-five days, so they pay twenty-two days late on average. We don't have a report that tells us this directly, though.
Posted 6 months ago #
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