May 26, 2020

Payment delays


Digiday announced that payment periods could become longer with late payments occurring more frequent. According FastPay data, which provides both invoice factoring and access to media companies capital through the first three weeks of April 2020, payment delays on invoices to publishers and media agencies have increased by 20%. Another research conducted by Oarex, an invoice factoring service provider for media companies, has fou...nd that the number of firms which paid their invoices late rose 14.6%, to 55%, in the first quarter; Oarex’s research has involved invoices sourced largely from publishers and media agencies. “Our receivables normally take 58 days,” an executive at one large digital publisher said earlier this month. “It’s already 78 days now and I am assured it would take over 100.” Inquisitr , the digital news website, to terminate its relationship with an SSP after the SSP has changed its payment terms from 30 days to 90 days. Oarex data finds that, on average, the payment terms are increasing 15-45 days from their current levels. Due to this reason some publishers have changed the tactics they use when talking to advertisers. Benjamin Cohen, the CEO of PinkNews, said that in March, his sales team told several advertisers that it would not turn ad campaigns on until the advertisers paid. It works good in circumstances where PinkNews was playing a key role in the advertiser’s plans. There are different reasons for payment delays. Companies that furloughed or laid off workers are now operating more slowly, as diminished staffs try to pick up slack, said Secil Baysal, the president and chief operating officer of FastPay. Also it may be the result of more companies trying to hold onto cash as long as possible, hoping that the arrival of the third quarter, when the economy could be running more smoothly, bringing some relief to their businesses. FastPay has already seen a 277% increase in capital requests this month — and Baysal expects payments to continue slowing down over the next few months. He said there may come a point where extending payment windows much further could become “insolvent.”

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