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European Payment Practices
The British pay late but reliably
Only 59% of invoices are paid on time / Lowest bad debt losses in the Ten Nations Survey / Companies check customers’ credit standing as standard procedure
Hamburg, 21 August 2009 – Scarcely two-thirds of invoices in the United Kingdom are paid within an average payment period of 31 days. This is one result from the EOS Ten Nations Survey 2009 ‘European Payment Practices’. For the purposes of the survey, the international EOS Group, provider in the areas marketing information, risk information, receivables management and payment services, in collaboration with the independent market research institute Ipsos, questioned 1200 companies among others in Bulgaria, Germany, the United Kingdom, Switzerland and Hungary on their payment practices. At 59%, the proportion of punctual payments in the United Kingdom puts the country behind Switzerland (75%) and Germany (77%). The British settle unpaid receivables comparatively quickly after exceeding the payment period: on average they pay 33 days after the period is over – in Bulgaria payments are received 44 days too late, 40 days late in Switzerland and 36 days late in Germany. The proportion of actual bad debt losses is very low in the United Kingdom at 1.4%. Hungarian (5.3%), Bulgarian (4%) and German (2.1%) companies suffer higher rates of bad debt loss.
Professional risk management
The area of risk management, receivables management and credit management is well established in British companies: 93% of the companies surveyed check the credit standing of new customers. This makes them more cautious in their choice of customer than Swiss (60%), Bulgarian (70%), German (75%) and Hungarian (82%) companies. Two-thirds of companies (66%) employ their own specialized staff in the area of credit management. By comparison, only 13% of Swiss and Hungarian companies, 24% of German and 26% of Bulgarian companies have in-house receivables experts. 37% of companies collaborate with external services provided by law firms and 31% with dunning or debt collection companies and consider the collaboration to be very effective. This type of efficient receivables management appears to pay off: only 4% of companies have encountered cash flow problems up to now as a result of delayed payments or non-payment.
Stuart Knock, Managing Director of Sales and spokesperson of EOS Solutions UK explains: ‘The results of the survey show that the area of risk and receivables management is well established in British companies. In the current crisis a lot of defaulters are not able to pay larger sums. To ensure that companies do not have to write off unpaid receivables, it’s worth collaborating with external service providers. Together with debtors they draw up individual and realistic payment periods.’
About the EOS Five Nations Survey 2009 ‘European Payment Practices’
In the spring of 2009, in cooperation with the independent market research organization Ipsos, the EOS Group asked a total of 1200 companies in five countries about prevailing payment practices in their respective countries. 200 companies in Bulgaria, Switzerland, the United Kingdom and Hungary respectively and 400 companies in Germany answered questions on all aspects of their payment experiences, economic trends in their home countries and the general topics of risk management and receivables management. Further results from the survey can be found online at
www.eos-solutions.com/surveys.
