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Late or non-payments amount to a €360 billion loss for European companies

12 May 2014

According to the European Payment Index, European companies have written off €360 billion due to late payments or no payments at all from customers over the last 12 months. 10,000 businesses were surveyed across 33 countries.

Lars Wollung, President of Intrum Justitia, the credit management group that handled the research commented, “The late payment consequences for businesses pose a real threat to Europe’s competitiveness and social wellbeing.”

Nearly 75% of companies admitted the late payment issue had not improved in the last three months, with almost half of companies believing the problem has only got worse. On average, suppliers are waiting for 47 days (after the agreed time stated in contracts) for payment. 

Large companies seem to be pushing smaller companies down by extending supplier policy terms. Widening the window may help the larger companies with cashflow but only causes problems for those businesses who are stuck receiving late payment. 

Late payment can be a serious issue for small businesses and it is something that all directors must look into before it becomes real threat. Here are some tips to improve your debtor collection system.