Heading to Beijing today for a few days of meeting's and then to Tianjin for the Asia Society conference. Back in Shanghai next Friday night.

I was talking a few days ago with a visiting MBA student about balance sheets and standard payment cycles companies face. Mind you, these thoughts below only apply to my company's advertising and direct marketing technology services, but over the years from talking to others I think in general other companies see the same trends.

This list goes from the shortest cycle to the longest cycle. And they are quite general as I think to make them any more definitive we'd all need to sign a non-disclosure agreement:
Travel agencies - 30-60 days
Big multinationals (non-travel related) - 60 days
Hotels & airlines - 60-90 days
Consulting companies (law firms, accountants, market research) - 120 days
Ad/PR agencies - 120-150 days
Telecom companies - 120-180 days

The above is a simplistic view of things. Biggest headaches are from advertising/PR companies who often need to be paid first by their client before a service provider is then paid — and sometimes they might need to meet their own payroll before service providers are paid. I've heard that some ad companies for some clients go up to a year for receivables, but that's not as bad as dealing with telecom companies. A colleague of mine has a friend who exclusively deals with the Chinese telecoms and he has a 12+ monthly cycle. He was able to take out a bank loan based on telecom receivables just to get him through some periods of non-payment.

Consulting companies are sometimes problematic. Many are rep offices in China, and so they often need to pay offshore. This means their China offices need to coordinate with their overseas office to make an overseas payment. This all takes time. I think law firms will delay payment just because they can — same with accounting firms.

I'm not an accountant and I don't monitor if these stats are similar with what one might find overseas, but I think they are pretty standard for China. I'd love to be in a 100% cash business.