New Atradius Survey Reveals Changes in B2B Payment Behaviour

The 2020 Atradius Payment Practices Barometer is an annual survey that assesses the payment behaviour of businesses worldwide. The report published in Q3 2020 analysed the results for Western Europe and the United Kingdom, raising 5 key challenges to their profitability in 2021:

  1. Maintaining sufficient cashflow
  2. Tightening of bank lending
  3. Payment of outstanding invoices
  4. Changes in demand for goods or services
  5. Management of costs

Trade credit has played a positive role for businesses during the pandemic. The key benefits of trade credit have been utilised to encourage domestic and foreign sales and extend short term finance by offering or extending payment terms to customers. Looking ahead to 2021, businesses in Western Europe maintain hope despite the challenges identified.

Andreas Tesch, Chief Market Officer of Atradius “without exception, every country polled in Europe reported an increase in late payments which corresponds to an average two-thirds increase on pre-pandemic figures for the whole region.”

The governments who imposed the strictest lockdowns during the pandemic, unsurprisingly saw the strongest contraction in GDP. In Western Europe these were; France, Italy and Spain.

United Kingdom Leads the Way

Atradius identified trends during 2020 that businesses specifically in the United Kingdom highlighted, the key findings showed:

  • Trade credit is offered more by UK businesses than average in Western Europe with nearly 60% of B2B sales employing trade credit compared with 55% in Western Europe
  • Payment terms were lengthened due to the pandemic with approximately half of respondents confirming they granted longer payment terms
  • Since the pandemic, late payments have increased by 81% with overdue invoices increasing to 47%, compared to 26% in 2019
  • Discounts for early payment are used more frequently in the UK compared to Western Europe as a whole
  • UK businesses are optimistic about 2021 with 55% expecting the domestic economy to improve and 51% expecting international trade growth

Stuart Ramsden, Director for Atradius United Kingdom and Ireland comments that “The survey results indicate a degree of optimism within the business community with more than half of firms participating hopeful that 2021 will see the domestic economy improve….Businesses will need to be prepared for further challenges and take steps to protect their receivables while also seizing opportunities to trade and grow.”

You can find the full UK and Western Europe reports at the links below:

Atradius Payment Practices Barometer Western Europe 2020

Atradius Payment Practices Barometer UK 2020

Post Date | January 21, 2021
Post Author | Hannah Lyon-Wall