Customers
Who is slow, who is slow and getting slower, and where does the waiting cost more than the job earns?
Waiting costs the most margin at
Cordell Group
9% of the gross margin on their work goes on funding the wait — 79 days against 30-day terms
Not the slowest payer. The one where slowness and a thin margin land on the same customer.
Slowest to pay
Cordell Group · 79 days
against 30-day terms, and worsening in every one of the last five quarters
Printed beside the figure above because they are not always the same company.
Billed across all six
$2,013,000
in twelve months — 26% of it to customers more than twenty days past their own terms
How a customer is judged
- 1Median days from invoice to cash, over twelve months. Median, because one nine-month dispute would move a mean for years.
- 2Against their own terms, not against thirty days. Long terms agreed up front and honoured are a price, not a failure.
- 3The cost of waiting is the days past their terms at 11% a year, expressed as the share of gross margin it eats.
- 4Slow and profitable is a customer. Slow and thin is a decision, and it is the only combination this screen is really asking about.
- 5Nobody is judged on a single quarter. The panel is eight, because the interesting shape is a slope rather than a level.
The eleven percent is a rough cost of money and is not an accounting figure. It exists so that "they pay late" and "we make sixteen percent on it" can appear in the same sentence, which is the only way this decision can be made at all.
The one that was invisible
Cordell went from forty-eight days to seventy-nine over eight quarters, four or five days at a time. No single quarter was alarming and no individual invoice was ever the worst on the ledger. It was found by putting the medians in a row.
That is the argument for this screen existing at all: an open ledger can only ever show you today, and today has never once told anybody that a customer is drifting.
Six customers · ranked by how much of the margin the wait consumes
Cordell Group
Costs real marginWas fine. Has been getting worse every quarter for two years and nobody noticed until the median passed seventy.
- Median to pay
- 79 d
- Terms
- 30 d
- Billed, 12 mo
- $441,000
- Gross margin
- 16%
- Invoices settled
- 22
- Wait costs
- 9%of margin
Eight quarters, median days
48 → 79 d · line is their terms
Kestrel Interiors
Costs real marginSmallest customer, slowest but one, thinnest margin. Every part of this is the same fact from a different angle.
- Median to pay
- 68 d
- Terms
- 30 d
- Billed, 12 mo
- $92,000
- Gross margin
- 14%
- Invoices settled
- 11
- Wait costs
- 8%of margin
Eight quarters, median days
55 → 68 d · line is their terms
Ashgrove Developments
AbsorbedPays fine and queries everything. The cost here is our time, not our cash — about a day a month in the drawing office.
- Median to pay
- 44 d
- Terms
- 30 d
- Billed, 12 mo
- $296,000
- Gross margin
- 21%
- Invoices settled
- 27
- Wait costs
- 2%of margin
Eight quarters, median days
43 → 44 d · line is their terms
Loxley & Frame
AbsorbedSmall, steady, best margin on the book. Twelve days late and it has never once been worth a difficult conversation.
- Median to pay
- 42 d
- Terms
- 30 d
- Billed, 12 mo
- $184,000
- Gross margin
- 24%
- Invoices settled
- 15
- Wait costs
- 2%of margin
Eight quarters, median days
39 → 42 d · line is their terms
Pemberton Construction
AbsorbedEight days late, every time, for four years. Predictable enough to plan around, which is worth more than fast.
- Median to pay
- 38 d
- Terms
- 30 d
- Billed, 12 mo
- $612,000
- Gross margin
- 19%
- Invoices settled
- 34
- Wait costs
- 1%of margin
Eight quarters, median days
41 → 38 d · line is their terms
Vantage Civil
AbsorbedLong terms agreed up front and honoured. Forty-five days is their offer, not their failure, and it is priced into the quote.
- Median to pay
- 51 d
- Terms
- 45 d
- Billed, 12 mo
- $388,000
- Gross margin
- 22%
- Invoices settled
- 19
- Wait costs
- 1%of margin
Eight quarters, median days
56 → 51 d · line is their terms
Cost of money is taken at 11% a year across every customer, which is wrong in detail for all of them and is the same kind of wrong for each — so the ordering holds even where the amounts do not. Nobody should quote a figure off this screen into anything with a bank on the other end of it.