B2B payment practices trends, Asia 2024

Reports

Our survey of companies across Asia reveals key insights into current B2B corporate payment trends. Explore emerging dynamics that could shape the future of business transactions.

Silvia Ungaro

Senior Advisor

26 Sep 2024

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B2B late payments present profitability challenges for Asian companies

A complex picture on late payments emerges from our survey of companies in Asia. Although nearly half of businesses report consistent B2B customer payment behaviour compared to the
previous year, this masks deeper issues. The rest are almost evenly split between companies who say payment practices are worsening and those who see an improvement. The overall impact is that an average 46% of all B2B credit sales are affected by payment delays, with Taiwan, Singapore and Hong Kong hardest hit. There is a troubling trend with persistent late payments which indicate underlying issues that need to be addressed. Bad debts now stand at an average 4% of all B2B invoices, with Japanese companies especially affected by the additional financial strain being caused. The main cause of late payments suffered by companies across Asia is cashflow problems among their B2B customers.

%46

of the invoices issues by Asian companies in B2B trade are overdue

Asian companies split over insolvency risk outlook in the months ahead

The prevailing mood among companies in Asia is that payment behaviour of their B2B customers will improve during the year ahead. This was reported by 58% of businesses, indicating relative optimism across the many industries in our survey. Most of the remainder anticipate little or no change in payment practices, and only a minority say they foresee a deterioration. Similar positivity is found about the outlook for Days Sales Outstanding (DSO). Nearly half of Asian companies expect this to improve as they focus on effective management of customer credit risk that will help smooth business operations. Caution is found among the rest, who anticipate either no change or a worsening of DSO which could further strain cashflow. Our survey finds that businesses in Asia are split almost down the middle about the prospects for insolvency risk during the next 12 months. Ongoing late payments and credit risk challenges probably explain why 49% of companies tell us they expect insolvencies among their B2B customers to worsen in the coming year.

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers.

Interested in finding out more?

For a complete overview of the 2024 survey results for Asia, please download the full report available in the related documents section below.

Summary

Late payments are still a major issue for Asian companies, currently affecting an average 46% of B2B credit sales. Bad debts now stand at an average 4% of all B2B invoices, creating additional financial strain.
Cashflow problems are cited by 42% of businesses in Asia as the reason for late payments, notably in India. Inefficient payment processes among B2B customers is another major factor.
The main concern looking ahead for Asian companies is the impact of uncertain domestic and global economic conditions, with 35% of companies anxious that it could significantly affect business prospects.