Mexico: rising bad debt levels

Payment Practices Barometer

  • Mexico
  • Agriculture,
  • Chemicals/Pharma,
  • Food,
  • Metals,
  • Steel

6th July 2022

Over than 10% increase in the Mexico market in the levels of both B2B customer payment defaults and bad debts written off as uncollectible.


The 2022 edition of the Atradius Payment Practices Barometer survey findings for Mexico is a valuable opportunity to hear directly from companies about how their business operations are coping with the disruptive impact of the current challenging economic and trading circumstances.

Topics covered include: payment terms set for business-to-business (B2B) customers, the average time it takes to turn overdue B2B invoices into cash, the impact of late or non-payment on the business, and expected challenges to profitability during the coming months.

The survey questionnaire was completed by businesses in Mexico during Q2 2022. Responses given by companies polled are contained in the report for Mexico, which is part of the June 2022 edition of Atradius Payment Practices Barometer for the USMCA: soaring inflation prompts liquidity protection.

Key takeaways from the report for Mexico

Protective measures required to protect against rising bad debt levels

  • There was a more than 10% increase in the Mexico market in the levels of both B2B customer payment defaults and bad debts written off as uncollectible. The latter was particularly acute in the Mexico chemicals sector. The impact of this was a staggering rise in the strengthening of credit control processes across all industries, with a range of measures introduced to avoid businesses being hit by liquidity shortfalls and the serious problems which flow from that.
  • Protection against unexpected losses was reported by companies polled in Mexico to be a paramount issue, with a need to guard against businesses being liquidity squeezed. The financial weakness of customers was found to be a significant issue in the survey and the spark for higher payment default levels. Among the strategies used by Mexican companies were more regular customer credit checks, seeking external finance and avoiding customer credit risk concentration.

Strong strategic credit risk management amid positive future outlook

  • A heightened perception of the importance of good strategic credit risk management was reported by companies polled in the Mexico market. They told us the benefits of having a credit insurance cover included having access to in-depth information on customers as well as access to debt collection services and crucial market intelligence. It also helped to improve DSO and thus free up working capital. DSO remained steady for the majority of companies.
  • Companies in Mexico reported a generally positive outlook for the period ahead, signalling a rise in business confidence. The vast majority told us they expect both an improvement in payment practices and a significant expansion in trading on credit with B2B customers. One clear concern expressed about the future is that DSO will deteriorate. Other worries include the ability to keep pace with rising demand as the economy rebounds, about maintaining good cash flow and the impact of high inflation.

Key survey findings for Mexico

  • B2B trade on credit boosts sales with new customers
  • Flexible approach to payment terms, focus to avoid liquidity strain
  • Customer credit risk worsens, bad debt write-offs on the rise too
  • Liquidity shortfalls and admin troubles trigger customer payment default
  • Protection against unexpected losses has become paramount issue
  • Strategic credit risk management delivers key benefits
  • DSO worsening expected amid concern about coping with extra demand

Interested in finding out more?

Please download the complete report for a complete overview of the payment practices in Mexico and in the following local industries:

  • Agri/Food
  • Chemicals/Pharma
  • Steel/Metals


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