Atradius Survey Finds That 10% of Foreign Invoices are Uncollectable 30% Paid More Than 60 Days Late

By Atradius N.v., PRNE
Wednesday, May 4, 2011

AMSTERDAM, May 5, 2011 - An Atradius Credit Insurance survey of 1758 businesses in nine EU
countries found that 10% of foreign B2B invoices and 8% of domestic B2B
invoices are written off as uncollectable by the seller. These percentages
spiked to 18% for both foreign and domestic invoices in Italy and 18% for
foreign and 14% for domestic invoices in Great Britain. Despite
disproportionately long payment terms respondents from Spain reported that
only 1% of foreign invoices where uncollectable, but was the only country
surveyed in which payment default was more likely on domestic receivables.
The Netherlands had the lowest percentage of uncollectable domestic
receivables (3%).

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While an uncollectable invoice represents the worst case scenario for a
supplier, the uncertainty of when they will be paid is also a factor making
cash flow management tricky. Approximately 30% of invoices were paid late
with 11%-12% more than 60 days overdue. The impact is being exacerbated by an
increase in the use of credit over the past year to increase sales as
economic growth returns.

To combat this, most respondents (76%) have increased dunning,
outstanding invoice reminders. However, with more than 75% of respondents
citing an insufficient availability of funds as one of the most common
excuses for payment delay, the possibility that late payments will become
payment defaults is fairly high. Respondents from Belgium and France had a
more defensive approach to this and were the least likely in the survey to
offer credit.

In respect to the length of payment terms, Northern European respondents
clearly set shorter terms than Southern European respondents. On average,
respondents from Denmark and Germany set the shortest domestic payment terms
joined by Sweden in respect to foreign payment terms. This however was no
guarantee of timely payment. While Denmark and Sweden had the lowest
percentage of overdue domestic payments Germany had the highest percentage.
Late payments in these markets however tended to be paid sooner than in other
countries as they were the three countries with the highest percentage of
late payments made within 30 days of the due date and the majority of these
were paid within 15 days.

Isidoro Unda, CEO of Atradius commented; "With economic growth
recovering, businesses are anxious to build sales. The feedback of this
survey however confirms historical patterns persist wherein payment defaults
and insolvencies remain at an elevated level in the first years following a
recession creating a very dangerous period for suppliers of products and
services. Atradius itself has increased its risk acceptance to accommodate
our customers' growth aspirations, but we have a database of information on
more than 60 million buyers worldwide, underwriters across the globe who
assess buyer default risk daily and an international network of collectors
who understand the legal system in the country of the debtor and can
therefore maximise the likelihood of recovery of the outstanding debt. This
combination allows our customers to sell their products and service with the
confidence that Atradius credit insurance will protect them from payment
defaults of their buyers."

The Atradius Payment Practices Barometer is a semi-annual survey of
payment practices and behaviour of businesses engaged in B2B sales of
products and services. The complete report is available in the Publications
section of the 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 protect companies throughout the world from payment risks
associated with selling products and services on credit.




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

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