UK Payment practices

Statistical calculations

The two first sets of calculations are for payments made within the reporting period. The data is pulled from the PAYMENTH and PAYMENTD tables in GESPAY and is limited to a corporation. Payments to business partners defined as physical persons are not included.

The third statistic is for invoiced open items that are expected to be paid during the reporting period. The data is pulled from the GACCDUDATE table to find the due date and then from the PAYMENTH and PAYMENTD tables in GESPAY to define if the payment has been made and at which accounting date or value date.

Averages and percentages are based on when open items on an invoice are paid or on when they are still open and considered late.

For example, if an invoice has three unpaid open items, the calculations take into account three expected payments dates.  

Likewise, if an invoice has one open item that has two payments within the reporting period and that is still open with a due date belonging to the reporting period, the calculations take into account two payments and one expected payment.

Note: Other criteria that are considered:

• Invoice open item means that open items with open item type as invoice are considered, even if the invoice document has been entered manually and directly in the Journal entry function (GESGAS).
• When the value date is empty for a payment, the accounting date of the payment is considered instead.
• The partner control account that is considered is the paid partner or the control account entered in the payment or the Pay-to partner in the open item when there is no payment.

Excluded calculations

The following data is not considered in the report:

• Invoice, open item, or payment amounts
• Pre-payments open items and payments on pre-payment open items
• Discount lines on payments
• Credit memos on payments
• Unallocated payments, because they are not linked to any invoice open items)

Average time to pay calculations

The average time to pay considers the average number of days it takes for a supplier to receive payment. First, the report takes into consideration all payments within the reporting period based on the Value date or Accounting date parameter setting and calculates the gap in days between the value date or the accounting date of the payment and the invoice date of the open item. The total number of days for the period is divided by the total number of payments to calculate the average time for the reporting period.

Note: The due date of the paid open item is not considered in these calculations.

Example: For a report based on the Value date and the payments below:

156 days divided by 5 payments = An average of 31 days to pay  

Percent of payments within a defined number of days

This is the percentage of invoices paid within a range of days, typically 0 to 30, 31 to 60, and 61 and more days.

For each of the payment considered in the first statistic (Average time to pay), the time to pay is calculated by comparing the accounting date/value date of the payment and the accounting date of the paid open item.  Each payment is then associated to a range of days. The number of payments within a range is divided by the total number of payments for the reporting period to determine the percent of payments for that range.

Note: The due date of the paid open item is not considered in these calculations.

Example 1:Calculate percent of payments made within a range of 0 to 30 days:

3 payments within the range divided by 5 total payments for the reporting period = 60%

Example 2:Calculate percent of payments made within a range of 31 to 60 days:
1 payment within the range divided by 5 total payments for the reporting period = 20%

Example 3:Calculate percent of payments made after 61 days:
1 payment after 61 days divided by 5 total payments for the reporting period = 20%

Percentage of invoices paid late

This calculation is based on the agreed payment terms. That is, the percentage of payments that were due and not paid during the reporting period. However, if a payment was already overdue at the beginning of the current reporting period, it is not included because it was taken into account in the previous reporting period statistics.

These calculations are based on the gap:

Between the Value date or Accounting date of the payment and the Due date of the invoiced open item. The total number of payments past the due date is then divided by the total number of payments for the period.

Between the Due date of the invoiced open itemand the end date of the reporting periodwhen there is a part of an open item that is not paid.

Example:A negative value represents the number of days a payment was made before the due date. A positive value represents the number of days past the due date.

By Value date:                  5 late payments in 7 expected payments = 71.5% for the period

By Accounting date:       2 late payments in 7 expected payments = 28.5% for the period

Prerequisites

Report control and criteria

List of criteria

Description of the report

Limitations

While the statistics calculation takes into account data stored in GESPAY function, matching and unmatching processes (through LETTRAGE/LETTRAUTO and DELETTRAGE functions) are not considered at all in these statistics.

Error messages

In addition to the generic error messages, the following messages can appear during the entry :

Charts of accounts not compatible in the group

If you select a group of companies, you receive this error message if the chart of accounts is not the same for all companies.

Reserved for a group of companies

If you select a group of sites, you receive an error message. You can only select a company or a group of companies with the same chart of accounts.

A control account range OR control account group must be entered

You can only select one value for either of these two report parameters. They are mutually exclusive.