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

Wednesday 18 November 2020 07:46 CET | News

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

The study examines how companies can use recurring payments solutions to boost their payments strategy, shorten DSO (Days Sales Outstanding), and protect their bottom line.

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.

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Keywords: study, Forrester Consulting, GoCardless, recurring payments, DSO, accounts receivables
Categories: Banking & Fintech | Payments General
Countries: World
This article is part of category

Banking & Fintech