Payment behaviour quite often inadequate

The payment behaviour of European companies´ is anything but satisfactory. This is the message of a press report by the psychonomics AG. In the eyes of foreign business partners it is in particular the payment behaviour of Italian companies which leaves much to be desired: About one quarter of all business relationships (26 percent) are expressively judged to be “poor” in this respect.

Apart from Italy the most unreliable debtors are said to be based in Great-Britain, Spain and France. By direct comparison – in spite of the common contrary belief – the payment behaviour of companies in Eastern Europe is considered to be markedly better. German companies are in general praised by European business partners in this respect.

This was shown by the current “Payment behaviour 2006 barometer” study commissioned by Atradius, a loan insurer, and carried out in 2006 for the first time by the Cologne-based psychonomics AG market research and consulting institute in co-operation with the Financial Times Germany.

The payment behaviour of German companies is judged positively by 82% percent of European suppliers and only very seldom it is expressively considered to be “negative” (by 4% of suppliers asked). Only Switzerland and Austria do better in this respect. However, the payment behaviour of German companies is seen much less positively by their domestic suppliers: Three out of five domestic business partners (58 %) consider the payment behaviour to be “mediocre” at best.

In particular to small and medium-sized entities (SMEs) domestic as well as foreign receivables could amount to a problem of vital importance. Therefore four out of five German companies (79 %) are said to have already taken protective measures against bad debts. Only in the Netherlands companies are similarly aware of the problem.

29 percent of all companies questioned take out a credit insurance in order to protect themselves from bad debts. 19 percent prefer advance payments or cash. Internal and external debt collection are other means of debtor management being used. Almost one third of all companies surveyed, however, have so far not taken any measures. All the findings of the study are available on the Internet. GERMAN