W. Europe: businesses' financial stability at risk

Press release

Western Europe is facing its first annual increase in insolvencies in years. 2019 is predicted to end with a 2.7% rise in insolvencies, a trend that is expected to continue in 2020

Slowing economic growth, the escalation of the US-China trade war, and looming uncertainty surrounding the future relations between the UK and the EU are the key drivers of the upswing in business failures across Western Europe.

There is no end to challenging times in sight this year, and the forecast for next year is not positive either. The global business environment has deteriorated and is expected to remain troublesome over the coming months. Insolvencies are expected to increase again in 2020, putting the financial stability of businesses under severe strain

Andreas Tesch, Atradius Andreas Tesch
Chief Market Officer of Atradius




As revealed by the October 2019 Atradius Payment Practices Barometer survey for Western Europe, businesses are offering trade credit to their B2B customers, far more often than last year, to support growth of domestic demand and stay competitive on foreign markets.

On average, suppliers surveyed in Western Europe transacted 60.4% of the total value of their sales to B2B customers on credit (up from 41.4% last year). This compares to 67.2% in Eastern Europe, 50.9% in the Americas and 55.5% in Asia-Pacific (up from 38.8%, 45.8% and 48.1% last year respectively). However, the use of B2B trade credit varies markedly across the countries surveyed. Respondents in Denmark seem to be the most likely to offer trade credit to their B2B customers (75.5% of the total value of their B2B sales was reported to be transacted on credit, up from 61.5% last year). Across the other countries surveyed in the region, the proportion of B2B sales made on credit ranges from a high of 68.1% in Greece, to a low of 44.6% in France.

On average, nearly 30% of the total value of the B2B invoices issued by respondents in Western Europe over the past year remained unpaid at the due date. By country, this percentage climbs to a high of 35.1% in the UK and 34.8% in Greece and drops to 20.3% in Denmark, the lowest of the countries surveyed.

Payment terms have remained fairly consistent, with businesses showing reluctance to offer longer terms. Not unexpectedly, due to the ongoing uncertainty surrounding the future relations between the UK and the EU, and the related bleak insolvency outlook for the UK and Ireland, suppliers surveyed in both countries requested B2B payments much earlier than last year. In the UK, average payment terms stand at 20 days (down from 24 days last year) and in Ireland at 28 days (down from 31 one year ago).

Assessing buyers’ creditworthiness is the most common credit management activity in Western Europe. The survey data shows respondents from Greece (53%) perform creditworthiness checks significantly more often than their Western European peers (35%). Western European businesses also send dunning letters (outstanding payment reminders) to chase unpaid invoices. Dunning is used by 28% of respondents in the region with respondents from Greece being the most active (39% of respondents on average).

In response to the survey Andreas Tesch concludes: “By managing cash flow successfully, businesses can reduce the risk of a devastating financial loss caused by an insolvent buyer”.

The October 2019 Atradius Payment Practices Barometer for Western Europe was conducted in Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Spain, Sweden, Switzerland, the Netherlands and the United Kingdom. The reports can be downloaded from the publications section of the Atradius website.


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.