AR pros want more predictable payment: survey

The International Accounts Receivable Professionals (IARP), association has announced the results of its first annual survey designed to gauge current business practices and the future state of organizations from an accounts receivable and collections perspective.

Conducted with OB1, global B2B e-Invoicing network, the survey examined current invoicing and collections practices of AR professionals, and asked how they direct their efforts to ensure more predictable cash flow.

Thayer Stewart, Vice President of Marketing for OB10, said, “Although generally satisfied with their collections results, 41 percent of respondents have increased their collections efforts and slightly more than half have been contacting their customers more frequently in order to receive payment.

"Furthermore, in light of the increased collections activities, 71 percent of respondents said they had received requests from their customers in 2009 to invoice them electronically, with 42 percent saying they had received more requests in 2009 than in previous years. AR professionals view this positively, as 82 percent who received requests believe that submitting invoices electronically expedites the collections process.”

Results of the survey, which will be conducted annually, indicate that AR professionals are taking a number of steps to ensure more predictable payment from customers while predicting a general improvement in their organization’s overall economic situation in 2010. Survey participants included presidents, CEOs, owners, CFOs, AR directors and AR managers from organisations across a broad spectrum of industries and sizes.

The survey also asked AR professionals to indicate the average number of days it takes their customers to pay them once an invoice has been submitted. The result was an average Days Sales Outstanding (DSO) number of 36.1 days, with 69 percent of respondents citing that their invoices are paid between 26 and 50 days after submitted to their customers.

“Almost two-thirds of the AR professionals we polled told us that 2009 was worse than or about the same as 2008 financially,” said IARP CEO Tom Bohn.

“However, the outlook going forward is increasingly positive, as almost 60 percent of respondents said they believe their businesses will do better financially in 2010 compared to 2009. Of those expressing optimism, 63 percent say they have a positive outlook because their companies have become more focused in their sales and marketing efforts, 61 percent said they have been more successful in reducing costs and 58 percent say they expect the economy to rebound.”