Collecting what is owed to you has become a science, let's face it, it's difficult to get your clients to pay you. There could be hundreds of reasons why it's taking you so long to collect, and you can likely improve upon it, but the number one reason is your industry. There are a few industries who are infamously slow at collecting their accounts receivable. Below we've listed 10 industries with slow accounts receivable collection and their average number of days it takes them to collect.
1. Management of companies and enterprises - 125.1
The management of companies and enterprises comes in at the number one spot most likely because this group includes small business owners. Small business owners notoriously struggle with collecting on their accounts receivable because they simply don't have the resources to manage them appropriately.
2. Oil and gas extractions - 110.9
It's likely that oil and gas extraction companies have a high turnover rate because of the politics involved in that industry. Fossil fuel has been a hot topic for debate over the past three elections and it doesn't seem to be slowing down anytime soon.
3. Technical and trade schools - 109.3
Technical and trade schools are close to oil and gas on the collection scale because of the way they handle their student's money. Higher education, regardless of other variables, is always going to be more expensive, thus making it harder to collect.
4. Automotive equipment rental and leasing - 104.4
The auto industry is similar to the oil industry but with a greater emphasis on the politics between salesman and customer. There are so many dealerships and leasing offices that offer financial deals that it makes sense why this industry ranks so high.
5. Outpatient care centers - 99.0
Invoice and statement sending is a methodical process and outpatient care centers have to deal with it on a daily basis. We worked within the healthcare collection industry for almost two decades and it's a painstaking process.
6. Support activities for mining - 90.8
Mining is a backbone in blue collar America and it's important that they understand how vital it is to collect what is owed to them on time. It's interesting that such a traditional industry ranks in the lower portion.
7. Architectural, engineering, and related services - 74.4
It takes architectural, engineering, and related services takes almost 20 days less to collect what is owed to them than the next ranking. For such an expensive industries, and although it is still considered high, it is impressive.
8. Scientific research and development - 70.8
A lot of scientific research and development is funded by the government through grants, since there has been a boom in a number of people devoting their lives to the sciences, it makes sense why it may take a little bit longer to collect.
9. Foundation, structure, and building - 67.5
Surprisingly, even after all of the press about how construction industries are starting to face longer collection times, it lands in the 9th spot on our list.
10. Other heavy and civil engineering construction - 66.5
Finally, the last industry on our list involved heavy construction and civil engineering. Although an average of 66.5 days before A/R collection is high, they are in a much better position than the number one spot.
As you can see, there are many industries that take a long time to collect on their accounts receivable. There are many ways to remedy these long collection times but automated, cloud-based accounts receivable software is by far the leading trend within this industry. If your organization operates within this industry then it should be a top priority to understand how you can improve your collection.