13th April 2017.

Payment delays edge higher in Western Europe

CCR Magazine report today on a study from credit insurer Atradius that highlights that 41% of the total value of sales have been hit by payment delays – an increase from the 39% reported a year ago. Buyers are taking longer to pay and this is having a knock on effect on the number of sales being made on credit as businesses strive to protect their cashflow.

Nine out of 10 businesses in Western Europe have experienced payment delays on domestic and foreign B2B invoices in the past year.

Across Western Europe, domestic buyers are taking 59 days to pay invoices – five days longer than three years ago; while foreign buyers typically pay within 53 days. However, only 35% of foreign invoices, compared to 43% of domestic transactions are offered on credit terms suggesting a higher level of comfort in domestic trade, despite slower payment expectations. Insufficient availability of funds was the main reason for late payment (44% of cases).

James Salmon, a Director at The Credit Protection Association says “we encourage our members to communicate as soon as possible with customers once an invoice becomes overdue. Using our services they are able to identify the customers who are most likely going to be late payers and also collect payment from them should they delay. Therefore using our credit management services results in improved performance when selling on credit.”