{"id":3847,"date":"2019-03-07T17:30:44","date_gmt":"2019-03-07T17:30:44","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=3847"},"modified":"2022-09-05T16:10:07","modified_gmt":"2022-09-05T16:10:07","slug":"starting-the-clock-on-payment-terms","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2019\/03\/starting-the-clock-on-payment-terms\/","title":{"rendered":"Starting the Clock on Payment Terms"},"content":{"rendered":"

Introduction<\/strong><\/span><\/p>\n

Making improvements to working capital or cash flow requires a clear understanding of the details of current work processes, including fundamentals that include when payment terms begin, and the frequency and timing of payment runs<\/a>.\u00a0 For example, saying your payment terms are 45 days means different things if the clock starts based on the invoice date, the date the invoice is received, or the date materials are received.\u00a0 Actual payment terms are also impacted if payment runs occur daily, or if they take place semi-weekly, weekly, or at some other frequency.\u00a0<\/span><\/p>\n

Fortunately, for Peeriosity members, it\u2019s easy to draft an iPollingTM<\/sup> question and instantly find out how other members tackle the problem, with the ability to directly follow up with other participants for further discussion and dialogue.\u00a0 With Peeriosity, your poll will go to hundreds of members for a possible response, with those that have knowledge providing inputs that are likely to be directly on point to solve your issue, all at no cost to you. \u00a0Plus, the exchange is completely private, with only members whose companies provided an answer to the poll questions able to access the detailed results and findings.<\/span><\/p>\n

iPollingTM<\/sup> Results Review<\/strong><\/span><\/p>\n

Recently a Peeriosity iPollingTM<\/sup> question was created by a Peeriosity member company\u2019s Finance Director to find out how other companies administer payment terms and the frequency of payment runs.\u00a0 The results suggest that 84% of member companies begin the clock for payment terms based on the invoice date and 13% begin the clock based on the date the invoice is physically received for processing. \u00a0Here are the details:<\/span><\/p>\n

\"iPolling:<\/p>\n

Regarding the timing of payment runs, while 38% reported daily payment runs, a significant number of companies have payment runs that are on either a twice-a-week or weekly cycle.\u00a0<\/span><\/p>\n

\"\"<\/p>\n

Here are some of the comments from responding companies that provide additional insight into the approaches member companies take to these types of transactions:<\/span><\/p>\n