Extended days sales outstanding (DSO) due to late payments and slow settlement cycles
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- Root Cause: Outdated or complicated payment and financial operations systems (impacting margin for 66% of companies), heavy use of manual and paper‑based AR/AP processes by 56% of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)
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
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Evidence Sources:
- https://www.trustmytravel.com/the-trust-my-travel-blog/the-state-of-travel-supplier-payments-going-into-2025
- https://www.modulrfinance.com/blog-insights/travel-businesses-suffer-with-scale-when-counting-the-cost-of-payment-inefficiencies
- https://thepaymentsassociation.org/article/the-travel-payment-revolution-finding-opportunity-in-pain-points/
Related Business Risks
Margin erosion from FX spreads, bank fees, and high-cost payment rails on supplier remittances
Unrecovered costs from late customer payments versus fixed‑date supplier remittances
Labor cost overruns from manual supplier payment processing and reconciliation
Excess processing costs from inefficient, complex payment ecosystems
Payment errors causing supplier disputes, rework, and service disruption
Operational bottlenecks from manual outbound payments limiting booking capacity
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