What is the typical range of days before receivables are considered overdue?

The typical range of days before receivables are considered overdue is generally accepted as 30 to 90 days. This timeframe represents a standard industry practice, allowing businesses to maintain a balance between providing favorable credit terms to customers and managing cash flow effectively.

Days outstanding beyond 30 often indicate that a reminder might be necessary, while once the 60-day mark is reached, accounts would usually be followed up more rigorously. Receivables that exceed 90 days are typically viewed as significantly overdue, which can raise red flags for potential collection issues.

Understanding this timeframe helps organizations in planning and managing collections, ensuring they take appropriate action to mitigate risks associated with uncollected receivables. Meanwhile, choices that reflect shorter or longer periods fall outside the prevalent norms seen in accounts receivable management and may not align with standard practices across various businesses.