2 in 5 businesses in the Americas expect DSO to worsen

Press release

Baltimore, 12 September 2017 - 2 in 5 businesses in the Americas expect DSO to worsen

Over 25% of the value of domestic B2B receivables in Brazil, Canada, Mexico and the United States remains unpaid more than 90 days past due. This was reported by 1 in 2 businesses surveyed in these countries. As a consequence of late payment by their domestic B2B buyers, 35% of the surveyed businesses had to either delay payments to their own suppliers or take specific measures to avoid severe disruptions to cash flow.    

The September 2017 edition of the Atradius Payment Practices Barometer, a survey of B2B suppliers in Brazil, Canada, Mexico and the United States, highlights that, 93% of the respondents in the surveyed countries reported having experienced late invoice payment from their domestic B2B customers over the past year (response rate in Europe: 90%). Late payment from domestic B2B customers was experienced most frequently by respondents in the US (96%, compared to 93% of respondents in both Mexico and Brazil and 89% in Canada). For US respondents, late payment from domestic B2B buyers translated into an average of 45% of the value of receivables being paid late. This seems to be one reason why 1 in 2 businesses surveyed in the US reported to be concerned about a significant deterioration of their DSO in the next 12 months.

1.5% of the value of domestic B2B receivables and 0.6% of the value of foreign B2B receivables was written off by survey respondents in the region as uncollectable. Mexico and Brazil were the hardest hit by uncollectable receivables. For 50% of respondents in the Americas, write offs were most often due to the customer being bankrupt or out of business. This was the most often cited reason by respondents in Brazil (53%). Other reasons were: the debt was too old (35% of respondents); the failure of the collection attempts (34%); the customer could not be located (33%). The Atradius Payment Practices Barometer also investigates the key factors for customer payment delays and the respondents’ opinion of payment practice trends by industry in the next 12 months. 

David Huey, Regional Director of Atradius Trade Credit Insurance NAFTA commented: “The unusual amount of uncertainty in the global economy, especially in matters of trade policy, appears to weigh heavily on the business environment. This is impacting payment behavior in the Americas as well as around the world. The results of our survey clearly show that, in the current economic climate, businesses are concerned about the impact of late payments on their liquidly position. This makes it essential for them to focus on B2B receivables management and credit insurance, to avoid cash flow disruptions that could cause a knock-on effect throughout the whole supply chain.”

Disclaimer

The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.