Inadequate accounts receivable management is a very common problem among the majority of business organizations
Half of all B2B invoice payments in Asia are overdue, according to the latest edition of the Atradius Payment Practices Barometer for Asia, which polled 1,200 businesses across China, Hong Kong, Indonesia, Singapore, Taiwan and the United Arab Emirates during Q2 this year.
Around 40% of the survey respondents are pessimistic about the outlook for their Days Sales Outstanding (DSO), and 25% express concern over their liquidity levels as the pandemic continues across Asia.
48% of respondents (with Indonesia the highest at 60%) indicated that they had to take corrective measures to reduce the impact of payment defaults on their business. 31% of respondents (with Hong Kong the highest at 37%) needed to pursue additional external financing to pay their own creditors. This may explain why 25% of businesses polled in Asia (with Singapore the highest at 32%) expressed concern about maintaining adequate cash flow over the coming months.
These statistics clearly indicate that accounts receivable has a big room for improvement.
The Atradius risk assessment guide shows seven (7) easy steps to help manage account receivables. For example, calculating Days Sales Outstanding (DSO) or considering debtors’ creditworthiness to help in projecting a clearer picture.
By identifying which default risks arise from the overall structure of your company’s accounts receivable could lead to improvement and success.
Click on the link to download your guide to assessing your accounts receivables risks.
