ID289 - AR Past Due More than Usual Overview & Sample

Letting a customer who is having cash flow issues get deeper in the hole is not doing any favors for either company. They may end up being forced to move service to a competitor when they can no longer pay your bill. This alert will warn when a customer's payments are later than normal, perhaps they normally pay 40 days late and now the average is 60.

It might make sense to also have this alert go to the sales person on the account. Could a customer with new cash flow issues be a prospect for a contract rewrite or a cost saving measure such as adding printers?

Alert triggers on unpaid invoices that are going beyond this customers normal average days to pay. We recommend sending daily to the AR person listing all new invoices to your customers who have invoices older than than (VarX=2) 2 times their normal ratio of days to pay. This only sends an alert once on each invoice.

Please note this alert will not pick up all the invoices past due on a daily basis. Please see alert ID21 to ensure past due customers are being contacted.

Alert set up to only report the new invoices that meet the criteria set in the variables. The original intention of this was to alert on customers that have an invoice slipping past 2 (or variable X) times the average days they normally pay within. It's a heads up to your collections person to get on a call with the customer and find out. If customer normally pays within 10 days of the due date then this alert is telling you the invoice being reported is now 20 days past the due date. It will not report them again since it would make sense that your normal collection process would begin calling on them. 

Variable Explanation:

VariableW = # of days past payments should be averaged over –This looks back specified number of days to calculate average days each customer pays their invoices within.  If set too low you may miss the last quarterly or semi-yearly payments.  We recommend 180 or 360 but it must not be set lower than 90 days.

VariableX = Ratio of days past due 2= two times the customer average days to pay.  So if your customer averages payment within 20 days of the due date the system would alert you when they had an invoice over 40 days past due. We recommend a setting of 2 or 3.

VariableY = Minimum # of days from the invoice date they are past due.  Using an example of 15 the alert will not alert you unless the invoice is at least 15 days past the invoice due date.  This was added for those who use terms of due upon receipt. So if you had a customer that averaged 5 days to pay and variable X was 2 times the average or 10 days, they would not show up until the invoice due date was at least 15 days past due. 

Variable1 = Gives you the ability to exclude certain CustomerTypes, this is not a recommended practice UNLESS you are not responsible for collecting on those invoices and have no ability to encourage payment. Even then we can make a strong argument for wanting to know about changes to those payment habits...



The very first email produced will have ALL your past due accounts and may be a long list (especially if most of your invoices terms are due upon receipt). After that it will only report the new accounts that meet the criteria.

New customers won't be reported on since there is no payment history to calculate average days past due. After the first invoice is paid, then the alert will report on that customer compared to the average.

The output is sorted by Ratio of Days Past due in descending order. Also it is written ONLY for SQL version 2005 or higher.



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