Europe: ‘There is a lack of urgency’
Businesses are waiting longer for their money.
The payment behaviour in Europe has so far deteriorated slightly in 2016 compared to the previous year (see chart “Europe: Payment behaviour is stagnant”). The positive development observed from 2014 to 2015 has now come to a standstill. Invoices paid on time accounted for 80 per cent on average in Western Europe and 74 per cent in Eastern European countries. In 2015, the values were one percentage point higher in both geographic areas. Most companies do not expect the development to reverse again. These statistics are reported in the EOS Survey ‘European Payment Practices’ 2016, for which the independent market research institute TNS Infratest questioned 3,000 companies in 14 European countries.
Parallel to the stagnating payment behaviour, the payment deadlines companies allow their clients in 2016 have increased in comparison to the previous year (see chart on the left). On average, clients have 36 days, so two more days, to pay their bills. In the UK, companies allow their clients four more days than in 2015 to pay, and in Hungary, it is seven additional days. ‘When we compare the results of last year, we see a link between payment deadlines and payment behaviour,’ says Hans-Werner Scherer, Chairman of the EOS Group’s Board of Directors.
Contrary to the assumption that longer payment periods lead to punctual payments, clients actually appear to delay payment even further. ‘There is a lack of urgency and invoices are being forgotten,’ says Mr Scherer. ‘If this trend in extending the deadlines continues, we expect that the payment behaviour will deteriorate.’