Mahnquote

Mahnquote is a metric used in German-speaking business practice to describe the share of receivables that are settled after a payment reminder, or more broadly the effectiveness of a dunning process. In practice, the term can refer to different but related measures: the proportion of invoices for which a payment is received after a reminder within a defined period, or the proportion of reminders that result in at least one payment. The exact definition varies between companies and industries.

Etymology and usage: The word combines Mahnung (reminder) and Quote (share). It is commonly used in accounts receivable management, credit risk assessment, and lender reporting. It helps assess how effectively a company’s collection efforts convert overdue receivables into cash and can reflect the stringency of reminder steps and payment terms.

Calculation and interpretation: A typical calculation is the ratio of paid obligations after a reminder to the total number of reminders issued, expressed as a percentage. Some organizations report a first-reminder Mahnquote, a second-reminder Mahnquote, etc., to reflect the escalating nature of dunning. A higher Mahnquote suggests more successful collections; a low value may indicate lenient payment terms, weak credit risk controls, or broader economic stress.

Limitations: The metric depends on how reminders are defined, the time window, and whether partial payments are counted. It should be used alongside other indicators such as days sales outstanding (DSO), aging analysis, and write-off rates to form a complete view of credit and liquidity risk.