Atradius Survey Finds 30% of Invoices Paid Late; 3% Defaulted on

AMSTERDAM, October 25, 2011 -

- Primary Reason is That Buyer Had Insufficient Funds to Pay

Payment delays and payment defaults continue to be a major issue for businesses around the world. According to the survey respondents of the Atradius Payment Practices Barometer, on average, 3% of the total value of the B2B accounts receivables was defaulted on. 30% of invoices were paid late, 12% of which extended past two months overdue.

The Atradius survey interviewed 5,399 businesses across 27 countries and sovereign states in Europe, North America and Asia-Pacific. Southern European countries which, on average, extend longer payment terms reported the worst problems with late payments from domestic B2B customers ; 54% of Greek, 43% of Italian, and 39% of Spanish domestic invoices were more than a month overdue (overall survey average 30%). 18%, 10%, and 7% respectively were more than 3 months overdue (overall survey average 6%). In the Asia-Pacific region, 14% of Indonesian domestic B2B invoices were reported to be more than 3 months overdue.

At overall survey level, approximately 3% of domestic B2B invoices resulted in payment default. In Europe, survey respondents in Greece and Italy reported the highest average payment default rates from B2B customers (6% and 5% of B2B domestic receivables were reported as uncollectable). In the Asia-Pacific region, similar payment default rates were reported by respondents in Indonesia and Hong Kong (all 5%). In North America this was the case in Mexico.

Insufficient availability of funds was cited as the prime reason for payment delays from B2B customers (66% of respondents reported it as a prime reason for domestic payment delays, 46% for foreign payment delays). To reduce payment delays and payment defaults, about 30% of the survey respondents increased their active credit management in the form of more frequent checking of buyer creditworthiness, dunning (payment reminders), or monitoring their buyers’ credit risk. But usage of outsourced collections and credit insurance increased at a slower pace (about 15% of respondents increased their usage).

Isidoro Unda, Chairman and CEO of Atradius N.V. stated: “2010 has shown some improvement, but economic conditions in some markets continue to be precarious and insolvencies are again increasing. The survey results highlight the need for continued diligence in monitoring and managing trade credit risks.

“While many companies are taking prudent actions to improve the payment performance of their customers, more can be done to improve reimbursement rates when payments are defaulted on. Credit insurance and of outsourced collections can be valuable tools in limiting losses resulting from payment defaults.”

The complete report highlighting the findings of the 10^th edition of the Atradius Payment Practices Barometer 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 60 million companies worldwide and makes more than 20,000 trade credit limit decisions daily. Its products help to protect companies throughout the world from payment default risks associated with selling products and services on credit.

www.atradius.com

For further information: Atradius Corporate Communications, Christine Gerryn, Tel.: +31 20 553 2047, E-mail: christine.gerryn at atradius.com