Average Delay Payment calculation

manzellone

I need to calculate the average delay of customer payments. I wrote a function that - for every customer - filter CustLedgerEntry for closed Invoices and calculate the difference between the date the Invoice was closed (I don't consider partial payment) and the original Due date. I've got a doubt: if the invoice was closed by means of a Credit Memo should I consider the posting date of the Credit memo? Besides in that DB users usually apply the Invoice to the payment (I mean, doing a manual application they set The Invoice as the applying entry , as a result is the payment Customer ledger Entry with values in Closed at date and Closed By Entry No. fields).

Does anybody has never done something similar?

Any advise?

Savatage

I can't find the original post but here's a report you can try to see if it works the way you want. if it does then you can use the code whereveryou want.

http://savatage99.googlepages.com/50054 ... uation.txt

Slawek_Guzek

Hi,

This is a strictly business problem not a technical question, so the right person to ask would be a user who raised such a need.

If you are interested in my point of view on business side - the answer is no. Payment is a payment, which require the customer to have enough money on their accounts. So if you want to see how the customer is good/bad by analysing its payment habits focus on real cash, and not on invoices, which might be cancelled in fact...

An example - it is very easy to order anything for 20m€, accept an invoice, then cancel the order and request a credit memo within couple of days - you don't need to have any single one € to do that, but just imagine how big influence such a operation would have on customer payment history if you include invoices closed by Credit Memos. Answer yourself a question - would it be a good or bad customer?, and then compare the answer with the answer given by your algorithm.

You should not only focus on fully completed payments, but IMHO you should also include partial payment an wage them somehow, like calculating sum of intermediate values (cashPaid*delayInDays), and divide by the sum of the cash, or something similar similar. The goal is to exclude insignificant payments, like 5€ outstanding but for 2 years...

That's only my opinion.

Regards,
Slawek

David_Singleton

Slawek Guzek wrote:

Hi,

This is a strictly business problem not a technical question, so the right person to ask would be a user who raised such a need.

If you are interested in my point of view on business side - the answer is no. Payment is a payment, which require the customer to have enough money on their accounts. So if you want to see how the customer is good/bad by analysing its payment habits focus on real cash, and not on invoices, which might be cancelled in fact...

An example - it is very easy to order anything for 20m€, accept an invoice, then cancel the order and request a credit memo within couple of days - you don't need to have any single one € to do that, but just imagine how big influence such a operation would have on customer payment history if you include invoices closed by Credit Memos. Answer yourself a question - would it be a good or bad customer?, and then compare the answer with the answer given by your algorithm.

You should not only focus on fully completed payments, but IMHO you should also include partial payment an wage them somehow, like calculating sum of intermediate values (cashPaid*delayInDays), and divide by the sum of the cash, or something similar similar. The goal is to exclude insignificant payments, like 5€ outstanding but for 2 years...

That's only my opinion.

Regards,
Slawek

=D> Thats a very good piece of advice.

manzellone

Thanks eveyone. I'll try to make a weighted average delay calculation function.