Businesses are waiting on outstanding payments for 10+ days, study finds

96% of businesses have had outstanding payments for 10+ days over the 2020 year, according to a new Forrester Consulting study commissioned by GoCardless.

One of the key findings of the study is that having a high DSO is a key operational challenge for many businesses. While only 4% of businesses have a DSO of less than 10 days, the research shows four out of five businesses have wait times of 20-30 days to receive payments.

In addition to this, almost half (47%) of businesses say that the time taken to collect their accounts receivables has increased in the last 12 months - this demonstrates the struggle for many businesses to get paid in the current challenging environment of COVID-19.

Further findings include:

• 86% of enterprise companies have more than 20 full-time employees to handle recurring payments, primarily relying on CRM, billing, and accounting systems;
• 59% of businesses say that higher churn rates result in increased chargeback rates, whilst 57% of businesses say that higher churn rates result in an increase in customer service contact;
• On average, B2B businesses spend 16%-20% of the payment value to recover the payment. If a business has USD 100 million in annual revenue, with a 7% payment failure rate, and it costs 16% of that value to attempt to recover, that's > USD 1 million.
• Forrester surveyed 700 payment decision-makers in organisations that serve a mix of businesses and consumers, or business customers only.