Atradius Survey Finds Businesses Continue to Struggle to Meet Payment Deadlines
AMSTERDAM, September 30, 2010 /PRNewswire/ -- According to the Atradius Payment Practices Barometer, ( http://global.atradius.com ) twice yearly study of payment behaviour in B2B transactions, which reviewed payment management issues of 3,971 businesses in 22 countries and sovereign states across the world, businesses across the world continue to struggle to meet payment terms.
The study found that even in countries that had never slid into recession like China and Poland suffered severe impacts due largely to the challenges of working with customers in markets that were in a recession. Late payments or worse, payment defaults, were creating a range of issues for suppliers in respect to managing the financial health of their own businesses. The most frequently observed impacts were that survey respondents needed to take specific measures to correct their cash flow and that they had to postpone their own payments to their suppliers.
Over the past year, have overdue invoices ever caused you to....?
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While more severe measures, such as defaulting on business loans or becoming non-compliant with loan covenants were experienced less frequently, the fact that 15% to 18% of respondents from businesses in Europe and 18% to 22% of the overall survey respondents have experienced these problems demonstrates the knock on or ripple effect that even a handful of customers can have on the overall global economy.
Extent to which, in the last six months, your customers......
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More than 50% of the respondents of the survey received payments from customers late without having been informed of the customer's intention to do so. About 50% received requests for an extension of the payment term.
Isidoro Unda, Chairman and CEO of the Atradius N.V. Management Board, stated, "Late payments, particularly unexpected ones, can cause a business to delay payments to its own suppliers, delay loan repayments, default on loans or in the worst case force bankruptcy. There are a range of credit management practices that can be used to limit this possibility. A combination of three or four practices anchored by credit insurance is potentially the best protection against the risk that many or large payment delays or defaults result in extreme financial hardship."
The complete report highlighting the findings of the Atradius Payment Practices Barometer (http://global.atradius.com) can be found in the Publications section of the Atradius.com website.
About Atradius
The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily. Its products and services aim to reduce its customers' exposure to buyers who fail to pay for the products and services they buy. With total income of more than EUR 1.7 billion and approximately 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit.
SOURCE Atradius N.V.
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