Average Days to pay invoices

This customers’ metric is very useful to forecast cash flow. It is part of Business Central offering and can be seen on each customer card in the Statistics FastTab.

Understanding the average number of days it takes customers to pay their invoices is crucial for a comptroller, as it directly impacts the organization’s cash flow management. This metric, commonly known as ‘Days Sales Outstanding’ (DSO), provides vital insight into the efficiency of a company’s credit and collection processes. A lower DSO means that the company is able to collect payments quicker, leading to improved liquidity and a stronger cash position. This is particularly important for maintaining operational stability and meeting short-term financial obligations without resorting to external financing. Conversely, a higher DSO can signal potential issues in credit policies or collection practices, possibly indicating financial stress or inefficiencies in the receivables management. By closely monitoring this metric, a comptroller can make informed decisions about credit policies, negotiate better terms with suppliers, and strategically manage working capital. In essence, understanding and managing the average time for invoice payments is not just about tracking receivables; it’s about ensuring the overall financial health and operational efficiency of the organization.

Average Late Payments

This customers’ metric is very useful to forecast cash flow. It is part of Business Central offering and can be seen on each customer card in the Statistics FastTab.

For comptrollers, understanding the average late payments is essential as it directly influences the financial stability and cash flow management of an organization. Late payments can significantly disrupt the predictability of cash inflows, making it challenging to meet operational costs and plan for future expenses. By monitoring this metric, a comptroller can gauge the effectiveness of the company’s credit and collection policies and identify potential issues with certain customers or market segments. This knowledge enables proactive measures, such as adjusting credit terms or enhancing collection efforts, to mitigate the impact of delayed payments. Furthermore, a clear understanding of late payment trends is crucial for accurate financial forecasting and liquidity planning. It helps in ensuring that the company maintains adequate cash reserves to cover its obligations and avoids unnecessary borrowing, thus preserving financial health and creditworthiness. In sum, monitoring average late payments is not just about tracking receivables; it’s a strategic tool for safeguarding the financial integrity and operational continuity of the business.

It is, essentially, the sum of all Payments posting dates – invoice due dates, divided by number of invoices.

The 2 fields on the Customer card report the 2 metrics for the current fiscal year.

To get a sense of how the 2 metrics look like for a multi-year reporting and see the source code, check out my YouTube video:

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