One fallout of the recession has been companies’ putting off paying their bills, local accountants say.
R.J. Pile & Co. LLC tax director Carol Howard has watched the benchmark for receivables rise to 45 from the standard 30 or so, and Larry Greenwalt, managing partner of Greenwalt CPAs Inc., says 50 might be about as common. A few construction subcontractors even have to wait a relative eternity of 120 days.
Blame the recession, mostly. Businesses large to small looked for ways to stretch dollars, and delaying invoices was one way they did it. Pity the small business at the bottom of the mountain.
Greenwalt, however, says the recession only hastened a trend that started in the mid-2000s as businesses looked to supplement or replace credit lines. In other words, lengthy receivables might be here to stay.
Any observations of your own? Have you seen receivables get long-of-tooth, and if so, is this the new normal?