(Información remitida por la empresa firmante)
- Businesses spend 29 per cent of the working year chasing late payments, equivalent to 74 days
- Annual cost to the European economy exceeds the entire GDP of Finland
- On average each business is spending €9,194 per year chasing late payments
- Four in 10 European businesses are spending 10+ hours per week chasing late payments
STOCKHOLM, May 12, 2023 /PRNewswire/ -- Businesses across Europe are spending more than 74 days per year – more than a quarter of the working year* – chasing late payments, according to the annual European Payment Report from credit management services provider Intrum.
The 26th edition of Intrum's study features the opinions of more than 10,000 companies across 29 European countries and sheds light on the multi-faceted challenges that European businesses are grappling with this year in challenging economic conditions.
Its findings show the time spent chasing late payments by European businesses adds up to a cost of €275bn** to the European economy. This is more than the entire GDP [Gross Domestic Product] of Finland at approximately €272bn***.
Counting the cost across countries and sectors
Comparing across Europe, businesses in Finland are also impacted by some of the worst delays, with 51 per cent of businesses spending at least 10 hours every week chasing late payments.
France (49 per cent) is the second in line of countries where businesses spend the most time to hunt down money they are owed by debtors, followed by Poland (47 per cent), Germany (47 per cent), and Greece (46 per cent) also badly impacted.
Chart 1: Businesses spending 10+ hours a week chasing late payments, by country
When looking at differences between business sectors, the Banking & Financial Services industry spend the most time on chasing late payments, with 45 per cent of the surveyed companies in this sector saying they spend at least 10 hours on doing so. More than four in 10 of organisations in Business Services, Government & Public Sector and Mining & Minerals also see 10+ hours taken up every week by efforts to resolve late payments, with 44 per cent of the businesses for each of these industries reporting to be impacted to this extent.
In comparison, close to one in three Hospitality & Leisure businesses (29 per cent) spend less than two hours per week sending reminders for payment. In this industry, we also find the lowest proportion of respondents spend 10 hours or more on this effort.It is worth noting that the efforts businesses in respective sector spends on tracking outstanding payments could be a reflection on how much resources it has to spend on this activity. At the same time, the research points to a clear link between the numbers of hours spent chasing late payments and the extent to which companies perceive outstanding receivables as a problem. For example, more than eight in 10 (82 per cent) of companies operating in Banking & Financial Services respectively Business Services say that late payments are a problem for their business, followed by organisations in the Government & Public Sector (80 per cent).
Chart 2: European businesses spending 10+ hours a week chasing late payments, by industry
More than half of European firms (53 per cent) say they are finding it increasingly difficult to reach mutually beneficial terms with customers and suppliers on payments which is leading to protracted negotiations and missed payment deadlines.The same proportion of businesses have grown frustrated by customers asking them to postpone the date when they issue invoices and the deadline to pay begins counting down. Nearly two-thirds (61 per cent) of businesses also say getting paid more quickly could help them to prioritise their sustainability performance, helping to contribute to a stronger, greener economy, rather than needing to focus on efficiency. As sustainability becomes a stronger motivation behind customers' buying decisions, a shift away from sustainable practices to maintain efficiency could have negative long-term implications for businesses. Chasing late payments
Nearly three fifths (58 per cent) of European businesses take legal action to chase down debt while a third (34 per cent) have clear internal debt recovery processes. Among those spending more than 10 hours a week chasing overdue funds, these figures drop to 53 per cent and 28 per cent respectively.In contrast, among the businesses that take the longest to chase late payments, mediation and alternative dispute resolution processes are more popular approaches. These provide a less confrontational way to engage with clients and customers, but Intrum's findings suggest they come at the cost of longer resolution times. "Businesses across the continent have been forced to operate in a constant state of challenges. The perfect storm of high inflation, rising costs and a challenging labour market so soon after the pandemic has seen growth and innovation fall to the wayside for many businesses struggling to look further ahead", said Andrés Rubio, President & CEO of Intrum."Late payments have always plagued businesses but what was once an inconvenience has now become a top priority of the management agenda. Many businesses admit that resources currently spent chasing late payments could be redeployed for growth, investing in digital transformation and innovation, hiring and reskilling and geographical expansion, but in the short-term this simply isn't possible. The scourge of late payments means many firms are throwing good money after bad in an attempt to claim what is rightfully theirs.Prompt payment habits from suppliers can help businesses prioritise growth and be in a more positive position to recover more quickly than their peers as the economic picture brightens."Notes to Editors
*255 working days of the year. 74 as a percentage of 255 is 29 per cent** Figure based on Intrum survey findings extrapolated using OECD data on working hours and average salaries across European economies*** https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=FIAbout The European Payment Report 2023The European Payment Report 2023 is an instrument for gaining insight into the challenges and opportunities businesses across Europe and a number of sectors are facing. The report is based on an external survey conducted by FT Longitude in 29 countries in Europe. In total, 10,556 small, medium and large companies across 15 industry sectors participated in the research. Respondents were CFOs or other persons with financial knowledge of the company they work for and the companies have been selected randomly from a B2B database. The fieldwork for the study was conducted between November 2022 and March 2023. Sign up to receive the full report on intrum.comFor further information, please contact:Kristin Andersson, Global Media Relations & Public Affairs Director+46 70 585 78 email@example.com
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