13 Accounts Receivable and Cash Collection Statistics You Should Know in 2024

In business, a healthy cash flow is the oxygen that keeps things running. While companies strive for increased sales and customer satisfaction, none of that means much unless the cash arrives in your business bank account!

Collecting payment from customers is crucial for smooth operations, investment in future growth, and organizational health as a whole.

This article dives into 13 key statistics you need to understand about accounts receivable (AR) and cash collection to optimize your business's financial health.

Firstly, late payments are not just a regional issue. They plague businesses around the world:

1: In the US, 55% of all B2B invoiced sales are overdue.

That's according to Atradius in a 2023 study. This issue is even more pronounced in the UK (58%) and parts of Asia (60%).

Why it's important: These statistics show how common late payments are. If more than half of your invoices are overdue, it significantly disrupts your ability to access the revenue you've earned. This can lead to cash flow shortages, delayed payments to vendors, and ultimately, hindering your business’s growth potential.

2: 25% of bankruptcies in Europe are attributed to late payments by customers.

That's according to European Commission data. Late payments are a significant contributor to business failures.

Why it's important: This statistic underscores the severity of late payments. They can be the tipping point for a struggling business, pushing them over the edge into insolvency.

3: 81% of businesses have experienced an increase in delayed payments.

That's according to a 2023 survey by PYMNTS.

Why it's important: The increasing prevalence of late payments makes it more difficult for businesses to accurately forecast their cash flow. Economic conditions and recession could be responsible for this large majority of companies reporting an increase in late payments.

4: 73% of UK businesses experience negative consequences of some kind due to late invoices.

That's according to a survey by Intuit Quickbooks.

Why it's important: Late payments can have a ripple effect throughout your business.

They cause a multitude of different negative impacts - from straining relationships with vendors, damaging your credit rating, taking up huge amounts of your finance team’s time with invoice follow up and limiting your ability to invest in new opportunities.

5: Bad debts affect an average of 9% of all credit-based B2B sales in the US.

That's according to Atradius.

Why it's important: This statistic highlights the financial risk associated with late payments. The reality is that a significant portion of revenues are being lost with customers failing to pay their invoices altogether.

6: 55% of businesses believe Days Sales Outstanding (DSO) will increase in 2024.

That's according to Blackline.

Why it's important: An increase in DSO means businesses are collecting payments slower. Implementing efficient collection strategies, such as automated reminders and early payment discounts, can help reduce DSO and improve cash flow.

7: Payment terms in Western Europe are getting longer - now averaging 52 days.

That's according to Atradius in their report on 2024 B2B payment practices trends in Western Europe.

Why it's important: While offering extended payment terms can be a sales strategy to attract customers, it also ties up your cash for a longer period. Approaching your AR management strategically helps ensure you collect payments efficiently despite longer terms.

8: UK SMBs are currently owed an average of £27,214 in late payments.

That's according to Intuit Quickbooks.

Why it's important: For smaller businesses, a large sum of outstanding payment can be financially crippling. It can limit their ability to meet payroll, pay bills, and invest in growth opportunities.

9: Small business owners dedicate an average of 10% of their workday chasing unpaid invoices.

That's according to a study from Xero.

Why it's important: Spending a significant amount of time chasing down payments takes away from other crucial business activities. Efficient AR processes free up valuable time and resources that can be better spent elsewhere.

10: 75% of finance leaders say accounts receivable has become more strategic over the past 12-24 months.

That's according to a 2024 survey from Revelwood.

Why it's important: The evolving role of AR highlights its significance in a company's financial health. Businesses are recognizing that efficient AR goes beyond simply collecting payments; it's a strategic function that can improve cash flow and overall financial stability.

11: Nearly half (44%) have automated only a few AR tasks, and over a third rely on manual processes.

That's according to a recent study by PYMNTS.

Despite the potential benefits, many businesses are lagging in automation.

Why it's important: Automating AR tasks can significantly improve efficiency and reduce errors. Businesses that haven't embraced automation are missing out on these benefits and may be struggling with manual processes.

12: 91% of mid-sized firms with fully automated AR systems report increased savings, cash flow, and growth.

That's according to a recent study by PYMNTS.

Why it's important: This statistic highlights the tangible benefits of AR automation. Businesses that invest in automation can experience significant improvements in their financial performance.

13: In 2024, 62% of companies plan to upgrade their AR-related technology.

That's according to a 2024 survey from Revelwood.

Businesses are recognizing the value of having the right technology to manage AR.

Why it's important: This statistic shows a strong commitment from businesses to improve their AR operations. Upgrading AR technology can lead to greater efficiency, faster collections, and improved cash flow.

Effective AR management is no longer an afterthought; it's a strategic imperative. By understanding the global landscape of B2B payments, the impact of late payments, and the growing importance of AR, businesses can leverage automation and strategic collection practices to improve cash flow, reduce bad debt, and achieve sustainable growth.