Nevada shows signs of improvement, still leads pack in most extreme delinquencies
QUINCY, Mass. AND BOCA RATON, Fla. – January 28, 2010 — Cortera™, a community-driven business credit bureau, announced the publication of its December 2009 Past Due by State report, a monthly index of accounts receivable (A/R) activities by state. Measuring the payment activities of approximately 20 million public and private business locations and approximately $150 billion in commercial A/R information, the report indicates that 20.85 percent of Oregon-based business accounts receivable are past due, the highest percentage of any of the 50 states. The top 10 most delinquent states, following Oregon, are Wisconsin (20.46 percent), New Mexico (19.79), Florida (19.72), Minnesota (19.64), Nevada (19.55), Michigan (19.15), New York (18.30), and Hawaii (18.05). Oregon’s past due rate is more than 24 percent higher than the national average (16.75 percent past due) and nearly 330 percent higher than Alaska, which has long maintained the lowest percent of past due accounts of all 50 states. The report indicates that the national average percent past due for all businesses has held in a tight range of approximately 16 to 17 percent for the last seven months.
Nevada, which has topped the list in eight of the past 11 months, showed signs of continued improvement in overall past due accounts but led all states in extreme past due accounts (the percentage of accounts 90-plus days past due) by a sizable margin. Nearly 14 percent of all Nevada-based business accounts were categorized past due by 90 days or more. Florida, the number two state in the extreme delinquency category, reported that just under 10 percent of business accounts were 90-plus days past due. The national average for such 90-plus day past due delinquencies was 6.04 percent. Such extreme delinquencies typically pose the greatest risk to cash flow and working capital, and thus create a drag on growth opportunities.
“Overall, past due A/R activity is showing signs of slow but steady improvement from the dramatically depressed levels at the height of the recession. But like other economic indicators, it remains to be seen how much of this is due to cost cutting and prevailing risk adverse practices, and how much is due to an influx of new cash into the system,” said Jim Swift, president and CEO of Cortera. “Given the tight credit markets, timely payments become increasingly critical as fluid cash flow dictates the working capital of not one but all interdependent businesses. It’s the classic ripple effect of, ‘if I don’t get paid, you don’t get paid.’”
The Cortera Past Due by State report tracks late payments against agreed upon terms, measuring the percentage of late accounts receivable by state. The full report is available on Cortera’s site.
In a sea of business information providers, Cortera is different. With over 15 years of experience serving finance professionals, Cortera combines premium business information and innovative tools with a fresh community approach to commercial credit. It represents the first community for small business credit reporting and a fundamentally new way to capture the collective insight of millions of financial transactions. As a result, small businesses can make smarter, informed decisions to ensure optimal cash flow while attracting more favorable payment terms from existing and potential business partners. Free credit reports on millions of businesses are available at http://start.cortera.com.