According to a recent article published by Trade Credit Insurance provider Euler Hermes, there’s good news on global business growth, with a significant deterioration in payment terms. Days Sales Outstanding (DSO) across all industries increased by +2 days in 2017 to 66 days on average worldwide, its highest level since 2007. It had previously been stable for five years, around 64 days. Euler Hermes said that it expects DSO to increase by +1 day in 2018.
Globally, Electronics, Machinery and Construction have the highest DSO (all above 85 days). They are also the sectors where the number of companies with DSO exceeding 90 days is the highest: almost half of the companies in Electronics, two out of five companies in Capital goods and Construction. On the other end of the spectrum, Agrifood, Transportation and Leisure goods companies are paid a lot faster than the global average.
Where does your local industry measure in the equation? Ask your peers at your next Industry Credit Group meeting.