Average days delinquent (ADD)
The average number of days invoices are paid after their due date, calculated as DSO minus best possible DSO.
ADD separates lateness from terms. A company on Net 60 terms can have a high DSO and a low ADD, meaning customers rarely pay late. A rising ADD means customers are paying later than they agreed to.
Because it strips out the effect of payment terms, it's a useful way to compare collections performance across business units with different customer mixes.
Further reading
Related terms
- Days sales outstanding (DSO)The average number of days it takes to collect payment after a sale, calculated from receivables and credit sales over a period.
- Best possible DSODSO calculated from current receivables only: how fast you'd collect if every customer paid exactly on terms.
- Past dueAn invoice that hasn't been paid by its due date. It stays past due, and keeps aging, until it's paid, credited or written off.