A large number of respondents set credit terms to credit days, but as you can see from the infographic below, only 31% get paid within that time. So really, are these credit terms meaningful?
So the question becomes, why state 30 days when it takes longer to actually get paid?
In fact, it takes 23% of businesses over 60 days on average to get paid by their customers. These businesses are effectively lending to their customers at 0% interest and might be paying overdraft rates to banks on this money!
Why does it take so long to get paid?
Every single company that completed the Credit Management Benchmark stated that they received the excuse from customers that ‘they never received the invoice.’ In many cases this is just an excuse, but how do you know whether or not they actually got their invoice? We will have more on how to do this in another post.
These statistics were gathered from the Credit Management Benchmark in 2014.