Posted by GenB_CA on 8/6/06 9:16pm
Msg #137386

Calculating Payment Time

When figuring out how long it takes for a company to pay; do you count all days or just the working days between dates?

I was just curious because it can make a big difference in some cases.

For example; if I left feedback on one company based on net work days I would tell others I received payment in 66 days. However, if I reported based on total days the number would jump to 93.

Although in this example neither one is desirable it illustrates how the different methods can affect the feedback we leave for others.

Any thoughts on this would be appreciated.

Reply by Brenda/CA on 8/6/06 10:14pm
Msg #137391

Gen,
I have a background in finance, and as an example an invoice with terms "net 30" is due 30 days from the invoice date, and is considered late when it is past that date. I allot for 5 days for mail time. However, I place a reminder call and send a past-due balance statement to the company @ 35 days, if I have not received payment. I will not work for any company that takes 60 days or more to pay me. Hope this helps, this is just how I do my business. As an independent contractor only you can calculate your own time frame of how long you are willing to wait to be paid.

Reply by LilyMD on 8/6/06 10:52pm
Msg #137392

I always count all days. Example: work completed 7/6 and paid 8/6 is 30 days. I like this method the best. However, I do know of one SA who counts only business days.

Reply by GenB_CA on 8/6/06 11:07pm
Msg #137396

Re: Calculating Payment Time -- Lily

I've been counting total days also. But I was setting up a chart in Excel and there is a formula to calculate net working days and it made me wonder how others counted.

Reply by Ndwa on 8/7/06 5:16am
Msg #137407

I count only the date the check was issued/printed. That's how I track a company's accounting consistency and may save me the hassle with the IRS. For example, if a check was issue to you on 12/29/06 and you received/recorded on 01/05/07. The check was reported on your 1099 as commission paid in '06, but you recorded it as '07 income. Hope I make sense as far as bookeeping wise.

Reply by Ernest__CT on 8/7/06 9:11am
Msg #137420

In Excel I count calendar days from the signing date until the date the check arrives in my mailbox. There are some companies that seem to keep the check hanging around for a week before mailing it. Compare the check date with the cancellation date on the envelope and with the arrival date.

Reply by GBailey_KY on 8/7/06 11:10am
Msg #137442

Calculating Payment Time Formula in Excel

It has been a while since I have done much work in Excel, and for the life of me, I cannot figure out how to set up the formula to count the total days from date of signing until receipt of payment. Will you be so kind as to share the formula you use? I think the version of Excel I have is from Office 97. Thanks in advance!

Reply by Ernest__CT on 8/7/06 11:29am
Msg #137450

Formula in Excel for calculating elapsed time

Happy to do so!

(I know this sounds silly, and I'm not trying to insult you!) First, be sure that the cells in the two columns for the signing date and payment date are formatted as date data. (I'm assuming that the signing date is in column B.)

Second, format the duration cells (number of days until payment) as numbers without a decimal part. (I'm assuming that the payment date is in column L).

Third, put the formula =L7-B7 in the duration cell or row 7.

Bingo! It took CompanyQ 45 days to pay you.

Reply by Ernest__CT on 8/7/06 11:32am
Msg #137452

Oops! Typo!

That should read "Third, put the formula =L7-B7 in the duration cell for row 7."

Reply by Ginger Bailey on 8/7/06 2:33pm
Msg #137499

Re: Formula in Excel for calculating elapsed time

Ernest,
Thank you so much for the formula. Thanks also for the concern about insulting me.....however, after having had teenagers and also passing the big 50 mark, it takes a lot to insult me....but the reminder was nice because sometimes I get so focused on figuring out a formula that I can overlook a basic component! lol