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How do I forecast accounts receivable and customer payment timing?
Look at how long each customer, or group of similar customers, historically takes to pay after invoicing, then apply those patterns to open invoices to predict when cash arrives. This is more realistic than assuming everyone pays on the due date, and it improves cash-flow forecasts.
Group customers by payment behaviour, size, sector or country. Calculate the distribution of days-to-pay for each group, not just the average, because late payers matter most for cash.
A simple model assigns each open invoice a probability of being paid in each coming week. Machine learning can refine this using customer history, invoice size and reminder activity, but needs enough past invoices.
Track actual receipts against the forecast each week and adjust.
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