PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

National Habits Complicate Working Capital Management

Patricia McGinnis by Patricia McGinnis
August 13, 2012
in Uncategorized
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

For many businesses, a measure of success inthe treasury area is the firm’s ability to keep its days salesoutstanding (DSO) as low as possible, and preferably below thirtydays. Citing research from REL Consulting, a division of TheHackett Group, CFO Magazine reports that when a firm hasinternational customers, it should expect to encounter culturaldifferences in payment practices, and different views about workingcapital.

REL Consulting studied 925 companies with a particular focus onEuropean firms. The data showed that Spanish and Italian firms werethe worst at collecting receivables promptly, with DSO commonlybetween 70 and 75 days. Not surprisingly, firms in those countriesalso took longer to pay their own bills. The disparity between billpayment practices and receivables collection practices was found tobe greatest in Germany and the Scandinavian countries. Firms ofthose nationalities typically paid their bills relatively promptly(with days payables outstanding of 30-35). However, they were farless efficient at collections, with DSO around 50, with associatedgreater strain on available working capital.

The diversity of national norms about bill payment, andexpectations about bill collection, will result in rather differentoutcomes from country to country for those firms attempting to moveto electronic invoice management, electronic matching, andelectronic bill payment. It is challenging enough just within theU.S. market to understand how electronic payment and its associatedacceleration of these processes works differently to the benefit ordetriment of buyers and suppliers. Firms with multinationalcustomer and supplier relationships will have to be prepared foreven more complexity. At the least, firms should use counterpartynationality as a variable in the metrics monitoring their abilityto collect receivables efficiently.

Tags: Banking ChannelsCompliance and RegulationDebitFraud Risk and AnalyticsMercator InsightsMerchant AcquiringMobile PaymentsPrepaidSelf Service and ConvenienceSocial Media
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Digital Wallet Use Delivers on Convenience and Security

    Digital Wallet Use Delivers on Convenience and Security

    May 30, 2023
    5 Ways to Protect Your Financial Institution from a Cyberattack

    5 Ways to Protect Your Financial Institution from a Cyberattack

    May 26, 2023
    traditional banks

    How Traditional Banks Can Modernize Without Risk

    May 25, 2023
    identity fraud

    Javelin’s Identity Fraud Study Highlights the Changing Nature of Fraud

    May 24, 2023
    SASE, security-as-a-service

    Security-as-a-Service Secures
    Distributed IT Models

    May 23, 2023
    mule. real-time

    Early Detection of Mule Activity Requires Real-Time Solutions

    May 22, 2023
    embedded finance, ecommerce

    How Retailers Can Enter the World of Embedded Finance Confidently 

    May 19, 2023
    cross-border

    Cross-Border Trade is a Cinch with the Right Payments Partner

    May 18, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download this complimentary report from Brightwell: