Asian firms split on insolvency outlook as trade headwinds continue

How are businesses across Asia coping with a fragmented B2B payment risk landscape?

Businesses across Asia are treading warily as they deal with a fragmented and complex B2B payment landscape. While some companies are cautiously optimistic about future sales and profits, others are fearful about cash flow problems and a deterioration in B2B customer payment behaviour. A significant 50% of firms also believe there will be a rise in customer insolvencies in the months ahead, posing a clear threat to financial health.

Our latest survey, conducted during the second half of Q2 2025, thus reveals an underlying fragility among companies in Asia amid widespread unease about how global trade policy uncertainties will impact on domestic economies. There is a remarkable mix of opinion across all the indicators, including an almost even split between firms experiencing stable, improved or worsening payment behaviour. The strain on business cash flow is highlighted by an average 44% of all B2B credit sales being affected by late payments. Bad debts average 5% of B2B invoices, but this figure masks vastly fluctuating rates among the various markets and the consequent serious threat to profitability.

Trade credit continues to play a central role in B2B trade across Asia, however, reflected in the survey finding that 54% of all B2B sales are currently transacted on credit. This is clearly a strategy to encourage sales and promote customer loyalty, but does mean increased credit exposure only partially mitigated by steady payment terms.

Managing working capital amid customer payment risk and economic uncertainty

The fragmented picture in Asia is also shown in the realm of working capital management. Companies are equally split between those anticipating change in future Days Sales Outstanding (DSO) and others who expect stability. Once again, this exposes unpredictability around cash flow cycles. There is a similar division about inventory turnover, with 50% of firms expecting steady turnover and the other half forecasting stock build-ups which could put significant strain on liquidity. Little change is anticipated in payment times to suppliers (DPO), but 33% of companies may consider delays to help with cash flow management.

Bank loans are the most popular source of external funding to help companies deal with liquidity issues in the current tough economic environment. Supplier credit and invoice financing are also important to many firms. The rising worry about a deteriorating trend in B2B customer payment behaviour probably explains why 60% of businesses already use a combination of internal funds and outsourced credit management, such as insurance, to mitigate the risk of customer payment defaults. This figure is likely to rise because companies are aware that relying solely on internal resources can freeze up cash that might be used for operations or investment.

A degree of optimism about future sales performance and profits is found among Asian companies, but this is laced with caution due to concern about increasingly volatile economic and market shifts. Other factors prompting vigilance are growing demands around regulatory compliance and the adoption of more sustainable practices.

Interested in finding out more?

Our survey across Asia includes responses from companies in China, Hong Kong, India, Indonesia, Japan, Singapore, Taiwan and Vietnam. The picture is of a corporate landscape which has resilience but also faces mounting financial vulnerabilities. As businesses brace themselves for future challenges the ability to manage payment risk strategically and flexibly will be pivotal in shaping their financial health during the months ahead.

The Payment Practices Barometer survey is conducted annually worldwide to monitor trends in B2B payment practices. The 2025 edition for Asia was carried out during the second half of Q2 2025. Individual reports, published as part of the Asia survey, provide market-specific insights and sector-based analysis. For a full overview of the survey results, please refer to the Related Content section below.