Why Accounts Receivable Days Keep Climbing for UK B2B Firms?

Q: How to calculate days in accounts receivable?

Use this simple formula: Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days This shows how long, on average, it takes to collect payment after a sale. A lower number generally means stronger collections and faster cash conversion.

Q: How to calculate accounts receivable from days sales outstanding?

Rearrange the DSO formula: Accounts Receivable = (DSO × Total Credit Sales) ÷ Number of Days This helps reverse-engineer your receivables number using days sales outstanding and total credit revenue.

Getting paid on time is starting to feel like the exception, not the rule. Across the UK’s B2B landscape, finance teams are seeing a familiar pattern: invoices are going out, but the cash isn’t coming in fast enough. Accounts receivable days are getting longer, and the knock-on effects are starting to show in the form of tighter cash flow, slower decision-making, and growing pressure on working capital.

Yes, the economy plays a part. But what’s really holding firms back are the internal roadblocks like manual processes, slow credit checks and inconsistent follow-ups. These are the things that quietly stretch out days in accounts receivable, even when demand is strong and the books look good on paper.

In this blog, we’ll break down what’s actually driving those delays and how the right accounts receivable automation tools are helping UK finance leaders speed things up without adding more to their team’s plate.

What Are Accounts Receivable Days—and Why Should You Care?

At its core, accounts receivable days tells you how long it takes to get paid after you’ve made a sale. It’s one of those deceptively simple metrics that says a lot about the health of your finance operations.

The formula is straightforward:

Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days

But the meaning runs deeper. When average days in accounts receivable start climbing, it’s often a sign that your cash is getting stuck somewhere in the system. The longer that money stays out, the harder it is to stay agile—whether that’s paying suppliers, funding new projects, or just maintaining a healthy buffer.

Why it matters:

It affects your cash flow, plain and simple.
It makes forecasting harder and more reactive.
It limits your ability to grow or pivot when the market shifts.
And it creates a lag between work delivered and value received.

What’s Driving the Rise in AR Days for UK B2B Firms?

For many UK B2B businesses, getting paid is taking longer than it should. A closer look at what’s really holding things up reveals a mix of avoidable inefficiencies and habits that no longer serve fast-moving finance teams.

Slow Payment Culture That’s Hard to Shake: In the UK, it’s become common for clients to push past 30-day terms, especially in sectors where late payments are the norm. Even good customers delay—not because they can’t pay, but because they know they can. And unless AR teams have the processes to push back, those delays get baked in.
Manual, Messy Invoicing Processes: Many businesses still rely on PDFs, email threads, or paper-based invoicing. That means more room for human errors like wrong PO numbers, missing attachments, or mismatched totals. Every mistake is a delay waiting to happen. And without automation in accounting, even small issues can take days to correct.
Weak Credit Controls Upfront: Poor credit checks or unclear payment terms at the onboarding stage set the wrong tone. By the time the invoice is due, you’re already behind. Without tools to screen customers or flag risk early, teams are left reacting instead of managing proactively.
Clients Chained to Their Own Delays: If your customer’s in a cash flow crunch, you’re not getting paid on time. Supply chain issues, high interest rates, or internal approval bottlenecks—whatever’s causing their delay ends up affecting your accounts receivable days outstanding.
Lack of Real-Time Visibility and Follow-Up: When your AR system is built around inbox reminders and Excel trackers, it’s easy to lose track of what’s overdue. Inconsistent follow-ups, missed escalations, and unclear ownership all slow collections. And without clear data, it’s hard to see where the real bottlenecks are.

The bottom line? Rise in AR days can be attributed to both external and internal issues, and that means there’s real opportunity to fix them. Top-performing finance teams aren’t just waiting for the economy to improve. They’re using automation to reduce accounts receivable days and take back control of their cash flow.

How Automation Helps Reduce Accounts Receivable Days

If you’re still using spreadsheets, email chains, and manual trackers to manage collections, you’re leaving cash on the table. Automation helps eliminate the slow, error-prone steps that quietly stretch your accounts receivable days.

Here’s how it makes a difference:

Invoicing gets faster and cleaner: When invoices go out late or with errors, payments slow down. Automated tools ensure that invoices are created instantly once a sale is closed or a milestone is hit. No more chasing POs or fixing formatting issues. That speed and consistency helps reduce your accounts receivable days ratio and improves predictability.
Reminders actually go out on time: Late follow-ups are one of the biggest reasons payments slip through the cracks. With accounts receivable automation, reminders are sent automatically based on due dates. Escalation rules are baked in, and everything is tracked. Your team doesn’t need to guess who to chase next as the system tells them automatically.
Credit risk is flagged before the invoice is sent: Many delays start before the first transaction. Without strong onboarding or credit checks, high-risk clients get the same terms as low-risk ones. Automation tools help assess creditworthiness upfront and customise terms accordingly. That keeps your average days in accounts receivable from creeping up over time.
Fewer disputes and cleaner reconciliation: A wrong total or a missing line item can delay a payment by weeks. With automation in place, every transaction is logged, matched, and validated in real time. Fewer mistakes mean fewer disputes, which in turn translates to faster payments.
AR teams focus on action, not admin: Dashboards give your team live visibility into which invoices are overdue, which clients are slipping, and where to focus next. Instead of pulling reports or sifting through email, they’re acting on the right data. That kind of real-time visibility is key to improving your accounts receivable days outstanding.

RELATED CASE STUDY: Discover the automation fix that eliminated manual errors in high-volume receivables. Read the case study.

A 5-Step Plan to Shrink Your AR Days

You don’t need to rip up your finance stack to fix collections. The fastest-moving B2B firms are trimming accounts receivable days by tightening a few key levers—here’s how:

Step 1: Find the friction

Map your current AR process from quote to cash. Where are the slowdowns? Which steps are still handled in spreadsheets or email? This is where most firms spot hidden delays in accounts receivable days outstanding that never show up on reports.

Step 2: Automate what hurts the most

Start where the pain is loudest—late invoices, missed follow-ups, or clunky credit checks. Use tools that integrate with your ERP so you’re not rebuilding everything. Even partial accounts receivable automation can make a huge difference.

Step 3: Track progress with real metrics

Don’t just guess if it’s working. Measure shifts in average days in accounts receivable, follow-up turnaround, and on-time payments. Data will show you what’s improving and what still needs work.

Step 4: Bring your team (and clients) into the loop

Automation isn’t a silver bullet if no one’s using it right. Train your team on new workflows, and tell clients what’s changing on their end. The more transparent you are, the smoother the shift.

Step 5: Improve it as you go

Automation doesn’t mean ‘set it and forget it.’ Use the real-time visibility to spot where cash is getting stuck. Tweak your rules, adjust reminder cycles, and keep refining until your accounts receivable days ratio starts moving in the right direction.

RELATED BLOG: Tired of chasing late payments? Check out these six practical strategies to put cash back in your hands!

Conclusion

The B2B firms making real progress on accounts receivable days aren’t just sending more reminders. They’ve fixed the deeper issues like messy processes and unclear ownership and replaced them with automation that works quietly in the background.

That’s where QX Global Group comes in. Our accounts receivable outsourcing services help UK finance teams modernise their setup, automate the repetitive work, and build systems that actually move the needle on cash flow. No overhauls, no disruption—just better visibility, faster collections, and fewer hours lost to chasing.

Want to see what this could look like in your business? Let’s start with a quick conversation.

FAQs

1) What is considered healthy accounts receivable days?

It depends on your industry, but for most B2B firms, accounts receivable days between 30 to 45 is considered healthy. Anything higher may indicate delays in collections or weak credit control. If your accounts receivable days ratio is climbing month after month, it’s time to investigate.

2) What impact do rising AR days have on a business’ cash flow?

Longer accounts receivable days slow down cash inflows, making it harder to cover expenses, invest in growth, or respond to new opportunities. When money stays stuck in unpaid invoices, your working capital takes a direct hit and forecasting becomes reactive.

3) How can businesses implement AR automation effectively?

Start by mapping your current accounts receivable process. Identify manual bottlenecks and look for automation tools that integrate well with your existing systems. Focus on key wins like automated invoicing, reminder triggers, and real-time dashboards. Train your team, set clear targets, and monitor your accounts receivable days improvement over time.

4) How to calculate days in accounts receivable?

Use this simple formula:

Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days

This shows how long, on average, it takes to collect payment after a sale. A lower number generally means stronger collections and faster cash conversion.

5) How to calculate average days to pay accounts receivable?

It’s the same as calculating average days in accounts receivable. Divide your total accounts receivable by your average daily credit sales, then multiply by the number of days in the period.

Formula:

Accounts Receivable Days = (Accounts Receivable ÷ Total Credit Sales) × Number of Days

This tells you how long customers are taking to pay, on average.