{"id":30782,"date":"2025-06-03T08:37:51","date_gmt":"2025-06-03T12:37:51","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=30782"},"modified":"2025-06-17T08:25:08","modified_gmt":"2025-06-17T12:25:08","slug":"industries-known-to-have-slow-accounts-receivable-collections","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/industries-known-to-have-slow-accounts-receivable-collections\/","title":{"rendered":"Industries with the highest average accounts receivable collection days\u00a0"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tIndustries with the highest average accounts receivable collection days \t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \">Published <time class=\"entry-date published\" datetime=\"2025-06-03T08:37:51-04:00\">June 3, 2025<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Industries with the highest average accounts receivable collection days\u00a0\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/industries-known-to-have-slow-accounts-receivable-collections\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/claudiamijares\/\">\n\t\t\t\t<img alt='claudiamijares' src='https:\/\/www.sage.com\/en-us\/blog\/wp-content\/themes\/sage\/dist\/images\/avatars\/author-fallback.svg' srcset='https:\/\/www.sage.com\/en-us\/blog\/wp-content\/themes\/sage\/dist\/images\/avatars\/author-fallback.svg 2x' class='avatar avatar-40 photo avatar-default entry-author__image' height='40' width='40' \/>\t\t\t\t<span class=\"entry-author__name\">claudiamijares<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">In many industries, businesses face varying timelines for collecting payments, but some sectors consistently experience longer accounts receivable collection periods than others. In this blog, we\u2019ll explore the industries that historically have high accounts receivable days and what that means for their businesses.<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-10-industries-with-longer-average-collection-periods\" data-level=\"2\">10 industries with longer average collection periods<\/a><\/li><li><a href=\"#h-what-does-this-mean-for-those-industries-nbsp\" data-level=\"2\">What does this mean for those industries?&nbsp;<\/a><\/li><li><a href=\"#h-best-practices-for-reducing-accounts-receivable-collection-periods\" data-level=\"2\">Best practices for reducing accounts receivable collection periods<\/a><ul><li><a href=\"#h-calculate-accounts-receivable-days-dso-and-track-ar-metrics\" data-level=\"3\">Calculate Accounts Receivable Days (DSO) and track AR metrics<\/a><\/li><li><a href=\"#h-compare-your-businesses-ar-days-to-industry-benchmarks\" data-level=\"3\">Compare your businesses AR Days to industry benchmarks<\/a><\/li><li><a href=\"#h-actionable-steps-to-reduce-the-accounts-receivable-collection-period\" data-level=\"3\">Actionable steps to reduce the accounts receivable collection period<\/a><\/li><\/ul><\/li><li><a href=\"#h-streamline-your-accounts-receivable-process-nbsp\" data-level=\"2\">Streamline your accounts receivable process&nbsp;<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-10-industries-with-longer-average-collection-periods\">10 industries with longer average collection periods<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Accounts receivable days (also known as <a href=\"https:\/\/www.sage.com\/en-us\/blog\/how-do-you-manage-cash-flow-and-collections-in-volatile-times\/\">Days Sales Outstanding<\/a>, or DSO) represent the average number of days it takes a company to collect payment after a sale has been made. The following industries tend to have longer collection periods, indicating delayed cash flow cycles compared to others:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Management of companies and enterprises<\/strong> \u2013 125.1 days<\/li>\n\n\n\n<li><strong>Oil and gas extraction<\/strong> \u2013 110.9 days<\/li>\n\n\n\n<li><strong>Technical and trade schools<\/strong> \u2013 109.3 days<\/li>\n\n\n\n<li><strong>Automotive equipment rental and leasing<\/strong> \u2013 104.4 days<\/li>\n\n\n\n<li><strong>Outpatient care centers<\/strong> \u2013 99.0 days<\/li>\n\n\n\n<li><strong>Support activities for mining<\/strong> \u2013 90.8 days<\/li>\n\n\n\n<li><strong>Architectural, engineering, and related services<\/strong> \u2013 74.4 days<\/li>\n\n\n\n<li><strong>Scientific research and development services<\/strong> \u2013 70.8 days<\/li>\n\n\n\n<li><strong>Foundation, structure, and building exterior contractors<\/strong> \u2013 67.5 days<\/li>\n\n\n\n<li><strong>&nbsp;Other heavy and civil engineering construction<\/strong> \u2013 66.5 days<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean-for-those-industries-nbsp\">What does this mean for those industries?&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Seeing high accounts receivable numbers like those listed above can be surprising, but they aren\u2019t necessarily a red flag, especially within industries where extended payment cycles are the norm. While every business aims to reduce its collection period, factors such as the company\u2019s business model and industry standards play a significant role.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, in the construction industry, an average collection period of around 70 days is fairly typical. You&#8217;re likely in good shape if your business is the same and in line with that benchmark. However, if your receivable days are significantly higher, it may indicate deeper issues with invoice collection and <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/cash-management\/\">cash flow management<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-best-practices-for-reducing-accounts-receivable-collection-periods\">Best practices for reducing accounts receivable collection periods<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Long accounts receivable days can strain your cash flow and slow business growth, but they\u2019re not set in stone. With the right data, benchmarking, and process improvements, you can take control of your collections and bring your AR days down to a healthier level. Here are some practical steps to help you get started:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-calculate-accounts-receivable-days-dso-and-track-ar-metrics\">Calculate Accounts Receivable Days (DSO) and track AR metrics<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The first step in evaluating your company\u2019s AR performance is knowing where you stand. The formula for accounts receivable days is (Accounts Receivable \/ Revenue) x Number of Days in Year. There are many other accounts receivable metrics to measure and track, so never let this be the only indication of the health of your invoice collection process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-compare-your-businesses-ar-days-to-industry-benchmarks\">Compare your businesses AR Days to industry benchmarks<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Once you know your accounts receivable days, it is essential to compare it to industry averages. If you\u2019re right in line with your peers or lower, that\u2019s good news. If you\u2019re higher, then you know there is some work to be done to reduce your accounts receivable days.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-actionable-steps-to-reduce-the-accounts-receivable-collection-period\">Actionable steps to reduce the accounts receivable collection period<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Once you understand where you stand in comparison to your peers, it may be time to start making adjustments to improve your invoice collection strategy to reduce average accounts receivable days. You\u2019d be surprised at how just a few simple changes can make a big impact. For example:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Finding ways to get your invoices to customers faster, such as <a href=\"https:\/\/www.sage.com\/en-us\/sage-network\/e-invoicing\/\">electronic invoicing<\/a> instead of snail mail.<\/li>\n\n\n\n<li>Calling customers after invoice delivery to ensure they received it, and if there are any problems that might delay payment.<\/li>\n\n\n\n<li>Sending monthly statements or <a href=\"https:\/\/www.sage.com\/en-us\/blog\/recover-past-due-invoice\/\">payment reminder emails<\/a> with invoice due dates.<\/li>\n\n\n\n<li>Using a business credit application template before extending credit to any customer<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-streamline-your-accounts-receivable-process-nbsp\">Streamline your accounts receivable process&nbsp;<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding which industries typically face longer accounts receivable collection periods is only the first step. Taking action to improve your AR processes can have a direct impact on your cash flow, customer relationships, and overall financial health.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If your business is ready to reduce AR days and streamline collections, explore how <a href=\"https:\/\/www.sage.com\/en-us\/products\/sage-ar-automation\/\">Sage AR Automation<\/a> can help you get paid faster and work smarter. Or, learn more about our <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/accounts-receivable\/\">accounts receivable solutions<\/a> tailored to your industry needs.<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner on-scroll-highlight__target\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Some industries experience significantly longer payment cycles than others. This article explores the top sectors with the highest accounts receivable collection days and offers practical strategies to benchmark and improve your AR performance.<\/p>\n","protected":false},"author":1850,"featured_media":20093,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"_pwl_sage_podcast_buzzsprout_src":"","footnotes":""},"categories":[43,48],"tags":[],"business_type":[],"lilypad":[],"context":[],"industry":[51,57,53],"persona":[],"imagine_tag":[],"coauthors":[508],"class_list":["post-30782","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","category-technology-innovation","industry-chemical","industry-financial-services","industry-manufacturing"],"sage_meta":{"region":"en-us","author_name":"claudiamijares","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-922601466.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/30782","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1850"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=30782"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/30782\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/20093"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=30782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=30782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=30782"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=30782"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=30782"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=30782"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=30782"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=30782"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=30782"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=30782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}