How old are our receivables?
№ 229 · AR aging waterfall
Definition
MetricShare of receivables past due by age bucket, with bad debt as the paired metric
Unitpercent of receivables balance by days past due, and bad debt as a percent of invoiced value
Wide hero bars showing AR balance by aging bucket (current, 30, 60, 90, 120+). Right-side bars are at risk. Build by aging open invoices. Above 90 days at risk of write-off; above 120 days usually unrecoverable. Example: $4.2M current, $1.8M 30-day, $620K 60-day, $480K 90-day, $260K 120+.
- AR
- Accounts receivable. Money owed by customers for invoices already issued.
Benchmarks
| Bottom 30% | Median | Top 30% |
|---|---|---|
| over 55 percent past due, bad debt above 7 percent | 40 to 47 percent of B2B invoices overdue at some point, bad debt about 5 percent of invoiced value | under 20 percent of the balance past due, bad debt under 1 percent of invoiced value |
B2B trade credit sales, surveys of credit managers across North America, Western Europe, the Nordics and Asia, fieldwork Q1 to Q2 2025, cross-checked against listed-company balance sheet ratios as of January 2026 · Atradius measures the share of B2B invoices that go overdue at some point in the period, not the share of the closing balance sitting in aging buckets, so its 40 to 47 percent figures are much higher than what a typical aging report shows on any given day. Treat them as a read on payment behaviour in the market rather than as a target for the waterfall itself. The top30 thresholds are practitioner conventions rather than published quartiles, which is the main reason confidence is medium. Bad debt percentages are self-reported by credit managers and range from 4 to 7 percent across the surveyed markets, with Denmark at the high end and Finland at the low end, a spread wide enough that a global average would mislead.
| Category | Bottom 30% | Median | Top 30% |
|---|---|---|---|
| North America | above 55 percent overdue | 44 percent of B2B credit sales overdue, about 5 percent bad debt | under 25 percent overdue |
| Western Europe | above 60 percent overdue | 47 percent overdue, about 6 percent bad debt | under 28 percent overdue |
| Nordics, Denmark | above 55 percent overdue | 41 percent overdue, 7 percent bad debt | under 25 percent overdue |
| Nordics, Finland | above 55 percent overdue | 43 percent overdue, 4 percent bad debt | under 25 percent overdue |
| Asia, eight surveyed markets | above 55 percent overdue | 44 percent overdue, about 5 percent bad debt | under 25 percent overdue |
When it looks bad
The 90-plus bucket grows in absolute currency every month while total receivables also grow, so the aging percentages look stable and the uncollectable balance compounds underneath them.
Receivables of $6.4M with 18 percent over 90 days in January and 17 percent in June, while the 90-plus balance itself moves from $1.15M to $1.42M.
What to do about it
- Chart the 90-plus bucket in currency rather than as a share of the balance. A growing book keeps the percentage flat while absolute exposure grows, which is precisely the failure this waterfall exists to catch.
- Run a dunning ladder tied to the buckets, with an automated reminder at day 3 past due, a named-owner call at day 15 and a credit hold at day 45. Hackett attributes an 18-day DSO gap between top quartile and median performers to process discipline of this kind, worth about $600 billion of trapped cash across the top 1,000 US companies.
- Price the terms you are actually giving. Atradius finds 44 to 47 percent of B2B invoices overdue across the major markets, so effective terms are materially longer than contracted terms; either shorten stated terms to reflect reality or charge for the extra days through a 1 to 2 percent prompt payment discount.
- Split the waterfall by customer concentration. A single account at 90-plus days representing 15 percent of the balance is a commercial negotiation, not a collections problem, and running it through the same process wastes the collections team and damages the relationship.
Sources
- Atradius Reports 47 percent of B2B invoices overdue in Western Europe with bad debts affecting about 6 percent of B2B invoices, and 46 percent of companies describing customer payment behaviour as unchanged, indicating a structural rather than sudden deterioration. group.atradius.com ↗
- Atradius Reports overdue B2B invoices at 44 percent of B2B credit sales in North America, a slight improvement year on year, with about 5 percent written off as bad debt in the agri-food sector and 53 percent of firms expecting insolvency risk to rise. group.atradius.com ↗
- Atradius Reports overdue invoices affecting 41 percent of B2B credit sales in Denmark with 7 percent written off as uncollectable, and 43 percent in Finland with bad debts at 4 percent of B2B invoices, with average payment terms of 31 to 60 days. group.atradius.com ↗
- The Hackett Group Reports receivables as the largest single component of excess working capital across the top 1,000 US listed companies, an opportunity of about $600 billion, driven by an 18-day DSO gap between top quartile and median performers, with DSO deteriorating for a second consecutive year. thehackettgroup.com ↗
- Atradius Provides the United States country cut of the 2025 Payment Practices Barometer covering overdue invoices, bad debt and DSO expectations for US B2B credit sales. group.atradius.com ↗
- Billed Aggregates the 2025 Atradius regional barometers, reporting US DSO at about 47 days and Americas DSO at about 48 days, Western Europe overdue at 47 percent with 6 percent bad debt, and Asia overdue at 44 percent of B2B credit sales with bad debts averaging about 5 percent. billed.app ↗
- TechIntelPro (reporting The Hackett Group) Reports the receivables opportunity at $600 billion with an 18-day DSO gap and notes DSO degradation reflecting extended customer payment terms. techintelpro.com ↗
- NYU Stern (Aswath Damodaran) Reports receivables at 12.39 percent of sales for US listed nonfinancial companies as of January 2026, which converts to roughly 45 days on a 365-day basis and provides the balance-sheet anchor for the survey figures. pages.stern.nyu.edu ↗