🇺🇸United States

Extended days sales outstanding (DSO) due to late payments and slow settlement cycles

3 verified sources

Definition

Travel companies often experience long lags between invoicing and cash receipt, with many payments arriving well after due dates. This stretches DSO, tying up working capital and constraining liquidity needed to prepay or secure capacity from suppliers.

Key Findings

  • Financial Impact: Average time to receive payments after invoice due date is 40.3 days, and nearly 40% of travel businesses report most invoices are paid outside specified terms, implying chronic working‑capital drag.[1]
  • Frequency: Daily
  • Root Cause: Outdated or complicated payment and financial operations systems (impacting margin for 66% of companies), heavy use of manual and paper‑based AR/AP processes by 56% of businesses, and cross‑border banking delays of more than three days for 45% of travel businesses.[1][3][8]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Travel Arrangements.

Affected Stakeholders

CFO, Treasury / Cash Management, Accounts Receivable Manager, Corporate Sales / Account Management

Deep Analysis (Premium)

Financial Impact

$100K-$200K annually (supplier premiums; lost discounts; service quality risk) • $100K-$250K annually (supplier premiums for event DSO risk; lost group booking discounts; emergency booking penalties) • $100K-$300K annually (operational planning rework; supplier coordination labor; cash float cost; DSO forecasting errors)

Unlock to reveal

Current Workarounds

Batch payment processing via spreadsheet; email-based payment confirmation; manual follow-up for missing funds • Custom Excel reports exported from GDS with email reminders • Dedicated manual follow-up by assigned staff member; email threads spanning 60+ days; escalation via account manager

Unlock to reveal

Get Solutions for This Problem

Full report with actionable solutions

$99$39
  • Solutions for this specific pain
  • Solutions for all 15 industry pains
  • Where to find first clients
  • Pricing & launch costs
Get Solutions Report

Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Margin erosion from FX spreads, bank fees, and high-cost payment rails on supplier remittances

For airlines alone, payment transactions cost $20.3B annually (2.2% of transaction value, ~78% of net profits), implying multi‑billion‑dollar leakage across the wider travel sector from payment costs and fees every year.[4]

Unrecovered costs from late customer payments versus fixed‑date supplier remittances

Average time to receive payment after invoice due date is 40.3 days; almost 40% of travel businesses report most invoice payments arriving outside specified terms, indicating systematic working‑capital leakage at scale.[1]

Labor cost overruns from manual supplier payment processing and reconciliation

60% of large travel firms lose more than 1.5 hours per employee per week to manual payment processing; at scale this translates into significant additional FTE cost that could otherwise be avoided.[3]

Excess processing costs from inefficient, complex payment ecosystems

Airline payment transactions alone cost $20.3B annually (2.2% of transaction value); broader travel merchants report payment system complexity as a major issue impacting profitability.[4]

Payment errors causing supplier disputes, rework, and service disruption

Manual reconciliations and errors for operators running multiple tours each season can “snowball into major delays and lost productivity,” indicating recurring operational and service‑recovery costs, even if not always quantified as direct refunds.[2][3]

Operational bottlenecks from manual outbound payments limiting booking capacity

60% of large travel firms losing 1.5+ hours per employee per week to manual processing indicates substantial lost operating capacity that could otherwise support more bookings and revenue.[3]

Request Deep Analysis

🇺🇸 Be first to access this market's intelligence