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Avg. Accounts Receivable - HOW MUCH?

Discussion in 'Polls' started by Doyle, Feb 22, 2007.

What is the Avg. Amount of your total unpaid invoices?

  1. Less than $500

    32 vote(s)
    27.1%
  2. $500 - $1,000

    11 vote(s)
    9.3%
  3. $1,000 - $2,500

    11 vote(s)
    9.3%
  4. $2,500 - $5,000

    17 vote(s)
    14.4%
  5. $5,000 - $7,500

    8 vote(s)
    6.8%
  6. $7,500 - $10,000

    9 vote(s)
    7.6%
  7. $10,000 - $20,000

    9 vote(s)
    7.6%
  8. $20,000 +

    21 vote(s)
    17.8%
  1. Doyle

    Doyle Very Active Member

    2,533
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    Dec 4, 2006
    Michigan
    Just curious as to what the average amount most shops have in their accounts receivable file at any given time. Looking for an average number here, because with me, it usually somewhere between $1,500 and $7,000, go figure.
     
    Tags:
  2. Bigdawg

    Bigdawg Just Me

    7,458
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    Jun 8, 2005
    Sunny Florida
    Most of my receivables are for design only work. Everything else I try to get payment when the job is done.
    I don't mind carrying the design accounts since there is no cash outlay for materials, but carrying signs or banners too long would kill me.
     
  3. Fred Weiss

    Fred Weiss Merchant Member

    20,410
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    Sep 11, 2003
    Olympia, WA
    The amount of receivables measured in dollars is meaningless and can potentially mean different things to different people. The measure we have used for many years is the percentage of one month's average business that is in receivables. So, for example, if one has $10K in receivables, that amount is quite different for the company that averages $7500 a month in sales (133%) when compared to the company that averages $75,000 a month in sales (13.3%).

    In our accounting system, any job which has been contracted for and has not been paid for in full becomes part of our receivables. Thus the $1000 in unpaid balances of completed work sitting on my pickup table is part of receivables, as is the job I booked yesterday for which I accepted a 50% deposit but haven't yet even begun to fabricate.
     
  4. Derf

    Derf Very Active Member

    For us it depends on the projects we are working on.. I average 15-20k but it has been as high as 35k and as low as 5k and that's when I go into panic mode but it has not been that low for some time

    A lot of our business is development companies and property managers that have an account with us. We do also have a number of customers that pay Deposits, Progress payments with a contract and some COD so its a well balanced mixed bag of cash flow.
     
  5. Doyle

    Doyle Very Active Member

    2,533
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    38
    Dec 4, 2006
    Michigan
    I see your point Fred, I guess dollars mean more to me than percentages. I look at how short I am on cash, then blame it all on my accounts receivable file. When my cashflow is good, I'm happy to see a pile of unpaid invoices.

    I know that these numbers will vary greatly with your monthly sales. Just curious as to what $ amount the average shop has.
     
  6. gabagoo

    gabagoo Major Contributor

    5,637
    90
    48
    Oct 10, 2006
    Vaughan, Ontario
    We run at any given time about $40,000. We do a lot of work for large corporations that have policies of 60 plus days. I don't mind though as they do pay and we can support it. It is also spread around without to much of it being solely one or two major customers. Nothing worse than receiving that big manilla envelope in the mail with lawyers names on it!!
    :Canada:
     
  7. mystysue

    mystysue Active Member

    999
    5
    38
    Mar 14, 2006
    We only have 30 days net on our account recievables, so Its not usually to high.. Right now its sitting a bit over 10,000 which seems to be about the average we carry. We do most of our business on half down half when sign is delievered with only a few accounts that we will carry. I love it when the mail man comes some days tho.. Now if you are also counting work done that will be paid for when picked up our a/c runs much higher than the 10 g..
     
  8. threeputt

    threeputt Very Active Member

    3,389
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    38
    Mar 10, 2006
    washington state
    We typically have 20-25 thousand, but it can be higher. For us it's usually about a month's gross, give or take. (8.33% Fred?)
     
  9. Pro Signs & Graphix

    Pro Signs & Graphix Very Active Member

    2,477
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    0
    Apr 18, 2006
    The busier you get - the bigger the client - the bigger the dollar amount. It is called the business "float" - and a fact of being in business. Having "zero" receivables is just as bad if not worse than to many receivables.
     
  10. Doyle

    Doyle Very Active Member

    2,533
    4
    38
    Dec 4, 2006
    Michigan
    I shoulda weant to colige
     
  11. Mark L

    Mark L Member

    You and me both!
     
  12. Sign Prophet

    Sign Prophet Member

    473
    0
    0
    Jan 5, 2007
    edumicashun is key.
     
  13. Fred Weiss

    Fred Weiss Merchant Member

    20,410
    342
    83
    Sep 11, 2003
    Olympia, WA
    No ... that's 100% by the way I have always tracked the stat based on one month's average gross. Back in the days when we were more willing to carry a lot of accounts, we would normally vary from 80% to 120%, so 100% is not unreasonable IMO.
     
  14. threeputt

    threeputt Very Active Member

    3,389
    1
    38
    Mar 10, 2006
    washington state
    Ok, good. I always figured that if we offer credit to our good paying clients, and they pay within 30 days, then we're going to have something like a months worth of work coming in at any given time.

    Our cash customers help keep the percentage under 100%. The lates and slows bump it up a fraction. But we do about 300,000 annually, so I guess that's ok.
     
  15. ScottyDoo

    ScottyDoo Member

    297
    0
    16
    Jan 2, 2006
    We've currently got about $30K at the moment, but it's been much higher, it just depends, I mean we've got $250K in WIP right now, and a good chunk of those orders are accounts with terms, so as soon as their status changes from WIP to Picked-Up that number is going to skyrocket for about 30 days.
     
  16. Craig Sjoquist

    Craig Sjoquist Major Contributor

    6,746
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    38
    Jun 18, 2004
    Orlando
    when I get get a unpaid invoice I'll remove the ad ...but thats cause they are playing games ... I've also poured gas on a car to get paid cleaned & waxed car after paid ... threaten to dump paint on lettered roof .. got paid ...... sprayed ..easy off ..on 2 ads would not pay after 50% depoist with in 2 mths said they paid enough and would pay more well it was a back lite sign ruined plastic too .. lost on a large window ad gave me 30 days of bull then closed n left ...thats why I'll remove .....thank you n enjoy life
     
  17. Geary

    Geary Very Active Member

    When I had a full on full time pro businesses....I LOVED the accounts receivable file...no matter what it was. It made me feel good sort of like "money in the bank". In the 10 years (off and on) that I had my "big" shops I think I was only burned twice to the tune of $5,000 total.
     
  18. mgieske

    mgieske Member

    196
    0
    16
    Oct 17, 2006
    Slatington
    I write off a grand or two every year to customer balances not worth chasing. Craig, loved your post. That's the reason why I enjoy the Sopranos so much. The system protects no pay losers & we spend $1k to collect anything? However, I do admire the new personal bankruptcy laws. I feel its time to modify corporate bankruptcy law as well.
     
  19. signs2trade

    signs2trade Active Member

    Avg Recievables....40,000
     
  20. OldPaint

    OldPaint Major Contributor

    Having "zero" receivables is just as bad if not worse than to many receivables.
    oh contrar............I RUN A CASH BUSINESS, i do..you pay... been at this since 1986 full time....and i run this business like I ran my bar...YOU WANA DRINK,........ YOU PAY WHEN SERVED!!!!
    so i can say i dont alow some people slack as a 1/2 up front and 2 payments on the remainder....BUT THESE ARE MY TRYED AND TRUE customers....or some i do business with takes 3-10 days to pay....but normally its HERES YOUR SIGN......PAY ME!!!!!
    one guy in sarasota gimme a 3-4 day run around for $20 dollars.....the 3rd day i showed up to get my money, he said i forgot my checkbook, i asked him what kinda flowers he liked, he said why ...told him so i know what to send to his hospital room while he was laid up from A BROKEN KNEE!!!!! he reached in his pocket and handed me a $20 BILL!!!!!!!!!!
    since 1986 i only have been screwed 3 times outa my money(and these where all in pensacola) and in total they amount to less then $800.00. but i will say the ones who didnt pay, KARMA GOT EM....i love EARL......hehehehehehehe
     
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