Monday, December 8, 2008

Distributor DSO Could Replace Net Profits as Top 2009 Indicator

Our Monthly TRENDS Report for October will be released soon and will show a median Days Sales Outstanding (DSO) of 48.28 (you can see September's report here). That's two consecutive months of median DSO over 48 days. In October, three HARDI regions had a median DSO in excess of 50 days! Consumer and commercial credit remains tight and commodity prices continue to fall creating a potential perfect storm for distributors in which decreased sales collide with falling margins. An inability to collect on those reduced sales could be crippling for many distributors.

All distributors should check out this excellent article, "Turning the A/R Crunch into a Profit Center" by Abe Sanchez produced by HVACR Distribution Business magazine.

Congrats to the Executive Development Committee for being ahead of the curve on this issue and lining up credit and collections expert, Abe Sanchez, for an "A/R Management Bootcamp" in Vail next month.

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