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Are customers asking for more time to pay?

The June CMI tells a familiar story: business is still growing, but it’s becoming more difficult to get paid. NACM’s seasonally adjusted combined Credit Managers’ Index (CMI) fell 1.5 points to 53.5 in June, marking its third straight monthly decline while remaining in expansion territory.
 |  Sara Asomaning, Managing Editor

The June CMI tells a familiar story: business is still growing, but it’s becoming more difficult to get paid. NACM’s seasonally adjusted combined Credit Managers’ Index (CMI) fell 1.5 points to 53.5 in June, marking its third straight monthly decline while remaining in expansion territory.

“The index has been in a range of 53-55 for almost two years with no discernable trend,” said NACM Economist Amy Crews Cutts, Ph.D., CBE®. “Respondents are noting the building stress in their receivable portfolios, with many mentioning higher shipping charges specifically tied to higher fuel costs.”

The Index of Favorable Factors declined to 59.7, led by a 5.3-point drop in Dollar Sales, though all favorable factors remained in expansion. Meanwhile, Dollar Amount Beyond Terms remained in contraction at 47.2, and Accounts Placed for Collection continued a nearly four-year stretch below the 50-point threshold.

What respondents are saying:

  • “The number of customers I see needing extended terms for similar dollar amounts compared to a few months ago is concerning. I see small trends in which even good-paying customers are going beyond terms or requesting more in credit than ever before.”
  • “The macroeconomic environment continues to impact overall sales and customer cash flow. We are seeing more chatter regarding extended terms—less requests, more demands for greater than 60-days terms. The pattern is similar to early pandemic reactions as businesses started holding their cash longer.”
  • “More small accounts are having a hard time making payments. Lots of customers are asking for extended terms.”
  • “Customers continue to apply pressure for extended terms and continue to delay payments for various reasons.”

What’s next: Help us capture next month’s story. The CMI depends on input from credit professionals like you. Participate in the upcoming survey—from July 7 to July 15—and add your voice to one of the industry’s leading indicators of commercial credit conditions.

Read the full CMI report here.

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Sara Asomaning, Managing Editor

Sara Asomaning holds a B.S. in English from Towson University. With a background in writing, copyediting and proofreading, she has a keen eye for detail. Outside of work, she spends much of her time being creative with music, photography, and social media content creation.