As posted in the latest Atradius survey, 2016 looks like a challenging year for the business system. Emerging critical issues in payment methods have caused financial difficulties for companies in Western Europe with a knock-on effect throughout the supply chain. The outlook for the insolvency environment is mixed, with little or no improvement expected in many advanced markets. This may be why companies in Western Europe seem to be more inclined to request payment methods from B2B customers that do not expose them to payment risk, or, conversely, to use riskier payment methods.
On average, 44,8% of sales to domestic B2B customers are made on credit, of which 55,2% are made in cash, or in terms other than trade credit, ranging from bill of exchange to letter of credit. The average percentage of credit-based sales falls to 37,7% compared to foreign B2B trade: on average, 62,3% of sales to overseas customers were traded in cash terms, or in terms other than trade credit. A staggering percentage of respondents in Western Europe (92,4%) reported that domestic B2015B customers paid their invoices late in 2. This resulted in an average of 40,3% of the total value of domestic bills being unpaid past their due date. For now, no percentage has changed since last year. Payment delays from foreign B2B customers, for their part, increased slightly to 84,6% from 82,1% in 2015. An increase to 38,3% from 35,4% last year was also recorded by sales paid late by the foreign counterpart. These data suggest how economic actors in Western Europe perceive the risk of default to be higher when selling on credit terms to foreign customers compared to domestic customers.
In Western Europe, Italy appears to be the market most affected by late payment of invoices from domestic B2B customers, as reported by 96,0% of respondents, causing an average of 49,4% of the total value of domestic B2B invoices not paid by the date expiration. These results are in line with the level of DSO observed in the country, with an average of 82 days the longest in the region. Followed by Greece (49,1%), with an average of 53 days of DSO. Leading the way in domestic B2B payments is Sweden, with an average of 24,3% of the total value of domestic credit sales (compared to 20,0% last year) pay late, however with late payments reported by 87,2% of businesses.
