Chasing late payments: Europe’s quarter of a trillion-euro expense
Intrum’s annual European Payment Report studies the impact of late payments on European businesses. Right now, European businesses are challenged with the demands of inflation hikes, the time constraints of chasing late payments, and trying to break free from the late-payments loop.
Intrum’s annual European Payment Report 2023 studies the impact of late payments on the development and growth of European businesses. The events of recent times are having a significant impact which is reflected in this year’s findings. As businesses manage the impact of rising prices, it’s inevitably becoming more challenging to agree on fair payment terms and to negotiate mutually acceptable contracts with customers.
Chasing late payments: a time drain
A quarter of a trillion euros a year. That’s the figure our latest survey determined European businesses are spending, on average, chasing late payments*. In other words, the average business spends an average of 10-and-a-half hours each week chasing customers over late payments – the equivalent of 74 days a year.
Taking stricter measures
Among the companies spending less than the average amount of time chasing customers, the preferred approaches to securing payment are legal action and internal recovery processes. These respondents are also noticeably less likely than the average to engage in mediation solutions.
Increased interest in the Late Payment Directive
This year, we observe an increase in the proportion of respondents making use of the European Late Payment Directive (ELPD). Nonetheless, respondents indicate that there is room for improvement when it comes to the legislation, with more than half saying that the compensation amount or the interest due on late payments should be made higher. Just one in 10 says the EU should introduce a fixed cap for payment terms, to define what constitutes a late payment.
Insights from the European Payment Report 2023
Download the full report today to understand the impact of the current late payment landscape on European businesses. Other key findings from the report include: ‘Inflation hits revenues and growth’ and ‘Businesses must learn how to break the late-payments loop’. Via the link below, you get the full pan-European Report, a White Paper including the country snapshots, plus a recording of the EPR 2023 Webinar.
*Figure based on Intrum survey findings extrapolated using OECD and EC data on working hours and average salaries across European economies. Please be aware that this is a rough estimate, calculated using 2021 data, which was the most recent available at the time of writing.
