Delayed payment occurs when a customer does not pay an invoice by the agreed due date. Persistent delayed payments increase DSO, strain cash flow, and may eventually become bad debt if left unresolved.

Example: A SaaS company with Net 30 payment terms finds that 20% of its enterprise customers consistently pay 45 to 60 days after invoice. The AR team introduces automated reminders at Day 15 and Day 25 to reduce payment delays.