If you use our CashCollect and Cashflow management services, you can use the client payment behaviors we gather in CashCollect to have a more precise cashflow forecast, closer to the reality of your client's payment delays.
What is the Average client delay
In CashCollect, thanks to the client data you import into the tool, the follow-ups you send to your clients, and each invoice's history, we build a comprehensive overview of each of your clients' payment behaviors. This include computing the Average client delay, for each of your clients, calculated and displayed in number of days:
It’s is an average of the time (in days) between the invoice due date and the invoice effective payment date. It is computed as an average at the client level.
The calculation is based on the invoices that were paid over the last 6 months.
The value is updated every day.
You can find the Average client delay in the Clients page, it is displayed in the 4th column of the client list
How and why use it in the cashflow forecast
Why have a client-impacted forecast
Your cashflow forecast is partly based on your Expected transactions, that usually correspond to client and supplier invoices, as well as other expected payments to occur in the future.
For the expected transactions corresponding to your client invoices, their due date is usually the invoice due date. This can be far from reality if your clients have specific payment behaviors (pay in advance, or very late, or with fluctuations depending on seasonality). Using the average client delay option allows you to have a forecast closer to reality, since the expected transaction due date becomes the usual payment date of your clients.
With the Average client delay option in the forecast, your Expected transactions will have a new due date that is impacted by the average payment delay of your clients. The new due date of the Expected transaction is computed as such:
New due date =
Invoice due date+Invoice delay+Client average delay
Important pre-requisite
You must have an active synchronization between CashCollect and your Expected Transactions in your Cashflow management tool in order to use that option.
To check if it is the case, make sure your credit Expected transactions' titles have the format: "Client invoice"-(invoice number)-(client name)
How to setup the average client delay in the forecast
This option is available to all CashCollect users and must be activated in CashCollect.
Go to Settings > Expected transactions.
Here you will find the list of options you have to personnalize the synchronization between CashCollect and your Expected transactions.
The first option relates to including the Average client delay in the forecast:
When clicking on the toggle to activate the feature, your Expected transactions due dates will be updated with the new calculation as detailed below. This change will be effective the next day.
What are the impacts of that option
The Average client delay is computed and updated every day with your CashCollect data. The Expected transactions due dates will be updated accordingly every day (early each morning).
Please be aware of those edge cases and limitations:
When activating the feature, if the
Expected transaction due dateis in the past, then theNew due datein set as todayIf the
Expected transaction due datewas in the past before the activation of the feature, it won’t be updated with theClient average delayvalue.If the
Expected transaction due dateis modified manually in the Expected transactions page, it will stop being synchronized with CashCollect client delay.
In order to limit extreme client delay behaviors, we have set up Client average delay limitations for your forecast. Those limitations are -30 days and 100 days, which means:
If the
Client average delayvalue is inferior to -30 days (clients pay, on average, more than 30 days in advance), we will use -30 days as a value, never below.If the
Client average delayvalue is superior to 100 days (clients pay, on average, more than 100 days late), we will use 100 days as a value, never above.
Examples
Here are some examples of how average client delay is used in the forecast.
If invoice due date = 30/04/23 and the client average delay = -10 days (the client pays before the due date)
Before activating the feature, the expected transaction due date is also 30/04/23
After activating the feature, expected payment date = 20/04/23
If invoice date = 30/04/23 and client average delay = 20 days, then expected payment date = 20/05/23
If invoice date = 30/04/23 and client average delay = 0 days or null (not calculated due to lack of data), then expected payment date = 30/04/23
If invoice date = 30/04/23 and client average delay = -45, then expected payment date = 31/03/23 (we use the -30 days limitation instead of -45 days)
If invoice date = 30/04/23 and client average delay = 132, then expected payment date = 08/08/23 (we use the +100 days limitation instead of +132 days)