The Need to Collect

Trade Collection Gap

Not only do B2B sellers face late business customer payments but also their collection effort is costly and rarely leads to 100% recovery: this is the erosion effect in invoice collection. The Trade Collection Gap is a measure of the lost cash flow and integrates both the topic of delay and of erosion of the collected amount vs. due amount. This gap is a critical metric for businesses, as it affects the overall cash conversion cycle, extending the time needed to turn sales into cash. The ultimate accounting hurdle resides in having to put provisions for aged invoices and write-offs for uncollectable bad debts, having to guess the impact of time on recovery

Severity & Impact of  That  Challenge

Industry data highlights the prevalence of this issue:
Late Payments: 64% of companies reporting delayed payments, with an average of 43 days to receive funds. 
Erosion: sellers write off approximately 1.5% of their accounts receivable as bad debt, a tangible loss in expected revenue. 
Compound: delays impact the probability of recovery: 
    - 90 days overdue = 70%. 
    - 170 days overdue = 50%. 
    - 360 days overdue = 20%. 
Industries: some face higher risks;  construction often contends with unpaid invoices amounting to about 6% of receivables. Services exhibit longer collection periods (Days Sales Outstanding -DSO ranging from 74 to 125 days) and high erosion with a double effect: reduction in revenues and in profit due to scope creep related to immateriality.

Limitation of current set-ups 

Current setups are limited by weak processes and governance, fragmented digital tools (often one-sided), and insufficient reporting and insights, weak control & enforcement mechanisms, which make it difficult for businesses to address delays and erosion effectively. For instance, sending a payment link to a business customer does not solve the issue in B2B, contrary to B2C situations. These gaps underscore the need for more integrated, technology-driven, and proactive solutions including the adequate dose of Trade Finance (see The Need for Trade Finance)  

The Trade collection gap is the difference between the invoiced due amounts and the collected cash for a given time period. It is a measure of the lost cash flow and integrates both the topic of delay and of erosion of the collected amount vs. due amount.
​

Complete the survey to share your views and receive a summary of the “Root Causes of Late Payments in Commercial Transactions"

Business Customers Collection Survey

New Solution

Based on decades of experience of fixing order to cash processes, TradinLoop founders have designed on online platform that addresses root causes at scale. TradinLoop addresses revenue erosion by providing an integrated platform that enhances visibility, automates cross-organizational processes and mitigates transaction risks from contract to cash. It enables tracking of delivery and invoicing, ensuring transparency and formal acknowledgment of deliverables. Additionally, it streamlines payment collections with predictive analytics and collection gap reduction tools, minimizing delays and erosions resulting in improved cash flow while safeguarding customer relationships (see The Need for a Coach): click below to know more about our services
Services

New Solution

Based on decades of experience of fixing order to cash processes, TradinLoop founders have designed on online platform that addresses root causes at scale. TradinLoop addresses revenue erosion by providing an integrated platform that enhances visibility, automates cross-organizational processes and mitigates transaction risks from contract to cash. It enables tracking of delivery and invoicing, ensuring transparency and formal acknowledgment of deliverables. Additionally, it streamlines payment collections with predictive analytics and collection gap reduction tools, minimizing delays and erosions resulting in improved cash flow while safeguarding customer relationships (see The Need for a Coach): click below to know more about our services

Services

Benefits to CFOs

TradinLoop reduces collection costs & improves its effectiveness in both time and value with automated processes and constructive collection bridge-gap tools. It ensures timely payments, enhances financial governance, safeguards profits and preserves customer relationships

Use Case: Immediate Profit Recovery

A professional services provider faces a massive backlog of unbilled WIP and overdue receivables, struggling to manage cash flows while under board and shareholder pressure to act immediately. The firm is concerned about the high costs and relationship risks of using debt collectors and lacks time for a lengthy IT overhaul. By adopting TradinLoop, the provider rapidly gains visibility into WIP, gets scope creep valued, automates billing at minimal cost, prioritizes collections, and reduces the Trade Collection Gap while avoiding disputes, enabling to secure more business while in collection mode. The platform enhances cash recovery speed and value, enabling the CFO to meet board expectations, improve cash flow, and reduce collection costs effectively and immediately.

Start your Friction - Free Journey

Towards Friction-Free Trade

TradinLoop is an innovative commercial transaction orchestration platform

Check out our Sustainability pledge here

Notice

  • Privacy and Cookie Policy
  • Disclaimer of Services: this site purely informational and does not provide any services or professional advice

Useful Links

+1 (315) 757-2866

Contact Us 

447 Broadway , 2nd Floor Suite #2651 New York , NY 10013 ,USA

®TradinLoop is a registered trademark with the World Intellectual Property Organization (WIPO)

Copyright TradinLoop ® All rights reserved

Thank You!

Thank you ! Your form has been submitted