A Quarterly Report for Benchmarking A/R Performance
Q2 2020 Report
Dun & Bradstreet and the Credit Research Foundation's quarterly US Accounts Receivable and Days Sales Outstanding Industry Report shows that the impact from the coronavirus pandemic has begun to materialize across certain industries, as more companies report that more than 10% of their aging dollars are severely delinquent, or more than 90 days past due.
The Q2 2020 reports shows that 45 of the 225 industry segments report more than 10% of their aging dollars are 90+ days past due, while the Q1 2020 report showed 33 industries reported this figure, and in Q4 2019, 23 industries reported more than 10% of their aging dollars were severely delinquent.
The coronavirus pandemic, while impacting certain industries, has not had a profound negative impact on every industry.
“While some industries are reporting significant slowness and payment delinquency, alternately, there are areas within the economy that are experiencing unprecedented growth and robust results - which is also reflected in their accounts receivable performance,” William F. Balduino, President and COO of the Credit Research Foundation, said.
For example, according to Dun & Bradstreet’s Commerce Disruption Tracker, certain industries, including broadcast media (TV and radio stations), central banking, and utilities are experiencing very low levels of industry disruption (disruption being defined as “the ability to operate, generate sales, and have employees perform their work duties.”)
Balduino advises business credit professionals to use this quarterly report to benchmark their company's A/R performance against industry averages and investigate the differences. Although differences could be driven by unique company portfolios, using credit best practices plays an important part in driving A/R performance.
“Hence the importance of a full portfolio analysis which allows credit risk management teams to properly assess and apply appropriate strategies across their customer base,” Balduino said.
The Q2 2020 report lists industries by SIC code, along with the percentage of Dun & Bradstreet reporting companies that are current on payments, then slow to 30 days late, slow to 60 days late, slow to 90 days late, and then severely delinquent at 91+ days late (for more information, see Methodology below.) The Q2 2020 report data is presented in 15 different industry segments: Agriculture, Chemicals, Construction, Consumer Goods, Energy and Utilities, Food, Machinery, Metals and Mining, Manufacturing, Retail, Professional and Business Services, Technology and Electronics, Transportation, Wholesale, and Wood and Paper.
Highlights of the Q2 report show that software companies in the software and publishing industry are reporting to Dun & Bradstreet that more than 50% of their accounts receivable dollars are paid severely delinquent. In addition, many of those industries with severely delinquent customers do not have the majority of their dollars current.
As a preview of the data available, the chart below shows the top 15 industries that paid more than 90 days late during Q2, April 1 – June 30.
Top 15 Industries Getting Paid Severely Late in Q2 2020
| SIC Code | Industry | % Paying Current | Up To 30 Days Late | 30-60 Days Late | 60-90 Days Late | 91+ Days Late |
|---|---|---|---|---|---|---|
| 7372 |
Prepackaged software services |
23% |
5% |
3% |
2% |
67% |
| 2741 |
Misc. publishing |
25% |
19% |
5% |
4% |
59% |
| 2759 |
Commercial printing |
33% |
13% |
5% |
4% |
44% |
| 5531 |
Retail auto and home supplies |
29% |
3% |
9% |
15% |
44% |
| 55 |
Automotive dealers and gasoline service stations |
33% |
3% |
8% |
14% |
41% |
| 5047 |
Wholesale medical/hospital equipment |
47% |
2% |
18% |
9% |
24% |
| 5142 | Wholesale packaged frozen goods |
48% |
14% |
8% |
7% |
22% |
| 3842 | Manufacturing surgical appliances/supplies |
49% |
13% |
10% |
5% |
22% |
| 3069 | Manufacturing fabricated rubber products |
63% |
9% |
4% |
2% |
21% |
| 3441 | Structural metal fabrication |
67% |
8% |
4% |
1% |
21% |
| 5122 |
Wholesale drugs and sundries |
59% |
11% |
6% |
4% |
21% |
| 7699 | Repair services | 56% |
15% |
7% |
4% |
18% |
| 7514 |
Passenger car rental |
29% |
21% |
16% |
16% |
18% |
| 7359 | Equipment rental/leasing | 52% |
10% |
13% |
7% |
17% |
| 3822 |
Manufacturing environmental controls |
49% |
20% |
9% |
5% |
17% |
Methodology
This joint report expands upon the Credit Research Foundation's own quarterly report, the National Summary of Domestic Trade Receivables (NSDTR), by providing aging A/R percentages on considerably more industry segments. Dun & Bradstreet’s aging A/R data is supplied by contributors to the Global Trade Exchange Program, its commercial trade data network, who report their trade payment information to help strengthen reporting of trade credit experiences. The DSO numbers are those collected by CRF from its NSDTR survey process. Dun & Bradstreet’s aging A/R data and CRF’s DSO numbers are presented side by side for an industry. Both sets of data are presented when the numbers of providers and survey results meet a minimum threshold of relevance.
