I have a customer who has been paying between 90 and 120 days for over a year. Yet when I go to the statistics it is showing as 18.59 days. What could be causing this problem?
Thanks

Hi Dawn,

What terms are typically extended to this user?

Hi Dawn

Do not trust the statistic. It is misleading for a number of reasons.

* It doesn't use weighted averages. So if a customer bought twice, paying a $10 invoice right away, and a $10,000 invoice in 90 days, the average days-to-pay will be 45 days.

* When you perform year end processing, it takes the existing days-to-pay statistic, and counts it as one sale. So there might have been 100 sales in 2005 averaging 60 days-to-pay, and one sale in 2006 which was paid in 20 days. If year end processing was done at the end of 2005, the average days-to-pay will be 40.

* An invoice which is NEVER paid is not factored into the statistic - now isn't that misleading!

If you want a more accurate calculation, it needs to be done using Crystal Reports and historical transactions.

Steve Schwartz

Hi Steve,

How would you change the behavior of Adagio Receivables to make that number more reliable?

I would include a report that prompts for a customer code and a beginning date. The report would include all paid invoices since the beginning date, and the weighted average days-to-pay at the bottom.

Anyway, that's an off-the-top-of-the-head answer.

Hi Steve,

When you talk about a "weighted average", how exactly would that be calculated? Could you give an example using your $10 and $10,000 invoices referenced above? I agree that ignoring unpaid invoices is very misleading - we should at least generate the statistic as though the unpaid invoices were paid within the current average days to pay....

I'm changing the example to make it more obvious. $100 paid in 10 days, $200 paid in 20 days.

$100 x 10 = 1000
$200 x 20 = 4000

Total dollar-days = 5000 divided by total dollar amount of $300 = 16.67 days

We extend net 30 but it is a very large company that was bought by another very large customer and they bascially pay whenever they want. They are getting better but the are now paying July invoices. Trust me they have never paid an invoice prior to 85 days, so I don't think that is the problem with the Averaging in this case. What else could be causing the strange averaging???? And although it is wonderful that a report can be done in Crystal, we don't have Crystal for Adagio. I was actually depending on this information when I have been giving credit references.