Western Europe is (generally) optimistic about the future

Our Payment Practices Survey reveals mixed results and bumps in the road, but overall the mood is upbeat

This year, close to 3,000 businesses across 14 countries in Western Europe shared their thoughts and experiences in our annual Payment Practices Barometer survey.

The top-level results are unsurprising. Businesses in Europe offer trade credit for almost half of all B2B sales. Late payments are widespread across the region, but as many as 40% anticipate improvement in payments behaviour over the coming year.

Below the headlines, the results vary widely

When we dig deeper, some of the results stand out especially when comparing individual markets and industry sectors.

For example, more than two in three B2B sales in Spain were completed with credit terms this year (67%). However, in Austria, this was closer to just 38% of B2B sales.

There is a similarly wide gap between the longest and shortest payment terms. In Greece average payment terms now stand at 32 days. In Finland, that figured is more than doubled, with the average length of time offered currently standing at 71 days.

Machines sector offers longest payment terms

The biggest gap in payment terms for industries can be seen in machines versus ICT. The machinery industry offers average payment terms of 64 days, whereas average terms for electronics/ICT is 43 days.

Interestingly, the machinery industry is reporting the highest level of debt across the region’s different sectors. Late payments for the sector are currently seen in 58% of all B2B sales.

Majority expect to see further insolvencies

When asked to look ahead, most of the businesses polled told us that they expect to see an increase in the number of insolvencies in the region. This was especially true for businesses in Austria, Switzerland and Germany, who told us they expect to see a rise in insolvencies among their B2B customers.

This may partly explain why the Austrian businesses we spoke to appear the most cautious about offering B2B trade credit to customers. However, such concerns are not limited to Austria, Germany and Switzerland. More than 60% of companies in the region anticipate an increased risk of insolvencies in the year ahead.

Reasons to be hopeful

Despite concerns over the increased risk of insolvency, however, there is a strong sense of optimism across businesses in the region. 40% of businesses tell us they anticipate an improvement in customer payment practices during the year ahead, with only 23% expecting deterioration.

Amid the widespread sense of optimism, concerns clouding the horizon include domestic economic conditions, issues such as regulatory compliance with sustainability targets and skills shortages.

You can read the key findings of the Western Europe results below.

Download our Payment Practices Barometer: Western Europe report