National Past Due Averages of Domestic Trade Receivables Results Summary

The Credit Research Foundation conducts surveys by industry which detail relevant statistical information concerning domestic accounts receivable performance. Below is a typical summary of this information.


A Typical Quarter Comparison
Independent median calculations show:

	This Quarter	Last Quarter	Year Ago
Day Sales Outstanding (DSO)	32.30	31.75	32.20
Days Past Terms (DPT)	7.30	6.80	8.80
Per Cent Current	82.67	82.09	79.26
*Per Cent Over 91 Days Past Terms	0.80	1.00	1.50

Days Sales Outstanding (DSO) – DSO is the average number of days it takes a debtor to pay a creditor. The above chart is based on terms of "net 30"..

Days Past Terms (DPT) – Accounts should be personally contacted by in-house personnel no later than ten Days Past Terms with follow-up every seven to ten days thereafter. Every contact should stress “Final Closure” and be absent of “Open Ends.” The value of an "Early Detection Program" is explained in our web pages at www.collectthemoney.com.

Payouts – Established immediately at 10 Days Past Terms if a customer admits financial difficulties. Otherwise “Final Closure” means that the theme should always be immediate payment in full whereby the customer follows through or defaults. At 30 Days Past Terms a customer should be reclassified as a “debtor.” All extended payouts should be completed at sixty Days Past Terms, which is ninety days after due date. 60 days past due is 200% additional consideration beyond normal terms.

PerCent Current – When examining 30 day net term receivables companies report that 82.09% of the total within a period is current.

*Percent Over 91 Days Past Terms – Approximately 8% is overdue at 10 Days Past Terms; and as illustrated above 1.00% at 91 Days Past Terms. “Ideally” third party “action” should be taken on an account between 30 and 60 Days Past Terms. At 90 Days Past Terms delinquent accounts should already be in the hands of a third party collector. A “timely” placement program of overdue balances with Williams & Williams, Inc. can result in a bad debt write-off of less than .1% of total sales (.001 x TOTAL SALES).

A Commercial Law League of America survey statistically explains the "Probability of Collecting Commercial Debts at intervals after Due Date". This survey which can be found in our Click to Directory at our home page, clearly shows that 30 days past due the probability of collection decreases at a rate of 10% per month after the following 8 months.