Czech Republic: upbeat businesses eye DSO containment

Reducing DSO (Days Sales Outstanding) helps maintain cash flow and has a positive effect on the financial health of the business. Czech Republic: upbeat businesses eye DSO containment Most of the Czech businesses polled opted to manage customer credit risk internally. However, and despite their efforts, many were not successful at containing year-on-year increases in DSO. Introduction The Payment Practices Barometer survey results reveal that, this year, most of the   businesses polled in the Czech Republic opted to retain and manage customer credit risk internally. However, and despite their efforts, many were not successful at containing  year-on-year increases increases in DSO (Days Sales Outstanding). Where this had a negative impact on liquidity levels, many businesses chose to pursue additional financing from external sources and had to absorb the additional costs this incurred. Key takeaways from the report Among the businesses surveyed in the chemical, consumer durables and steel/metals industries in the Czech Republic, an average of 48% of the total value of B2B invoices is currently overdue, an increase on last year’s 39%. 8% of all B2B sales were written-off as uncollectable. Czech businesses polled told us they increased the amount of time and resources employed, as well as costs incurred, in a bid to collect overdue invoices, especially those  long outstanding.  71% of the businesses surveyed opted to retain and manage customer credit risk internally. However, and despite their efforts, half were not successful at containing year-on-year increases in DSO (Days Sales Outstanding). Where this had a negative impact on liquidity levels, many businesses chose to pursue additional financing from external sources and had to absorb the additional costs this incurred. Although many businesses polled in the Czech Republic plan to continue with the same approach to credit management over the coming months, many showed an increasing appetite for credit insurance, particularly in the consumer durables and steel/metals industries. Despite a positive outlook for customer payment practices next year, Czech businesses polled will offer trade credit  to provide financial relief for B2B customers by allowing them extra time to pay. This may reflect businesses' concern over the health of the Czech domestic economy over the coming months. When asked to indicate which of the pandemic-induced changes to their way of doing business they expect to become long-term, 65% referred to a more frequent use of digital technologies including, for some, e-commerce. A significant number also cited meeting changes in customer demand (44%). Interested in getting to know more? The Payment Practices Barometer report for the Czech Republic gives insights into B2B payment practices and businesses' approach to the management of customer credit risk in the following local industries: Chemicals Consumer durables Steel/Metals For a complete overview, please download the full country report available in the Related documents section below. The Statistical Appendix and regional Payment Practices Barometer survey results are also available free to download. All content on this page is subject to our Disclaimer available here