Intrum Justitia European Payment Index 2014
A stunning 55 per cent of all 10,000 businesses taking part in EPI 2014 say they are suffering as a result of late or non payment of bills and invoices. This is the highest percentage in the history of the European Payment Index with 36 per cent of business respondents believing that their very survival is being threatened by late payment and every second company saying that it prohibits growth.
Even in Germany, Europe’s larger economy, businesses said they are now suffering hard from lack of liquidity. Some 35 per cent of the German companies said that late payments have a strong impact on steering the need to layoff people. The picture is the same elsewhere with some 30 per cent of UK companies, 28 per cent of companies in Spain and 25 per cent in France reporting the same correlation.
Despite all the talk of an end to recession, the total bad debt loss in Europe has risen further from 3.0 to 3.1 per cent of total revenues, equaling to a total of 360 billion euros for all businesses in Europe. That amount is, in turn, roughly equivalent to 8 million jobs.. Every year for the past eight years, the bad debt loss percentage has risen for European businesses.
- Imagine if European companies had those 360 billion euros they now need to write off on a yearly basis, to invest in their businesses! If all bills also were paid on time that would add further jobs to our economy. That is why companies’ credit management is a key to a sound economy. We would all be better off if bills were paid on time, says Lars Wollung, President & CEO of Intrum Justitia.
- Late payments accelerate a negative chain reaction for business where lack of liquidity forces downward measures in a degree rarely acknowledged. Hardest hit by the problem of illiquidity are small and medium enterprises, that is those firms that account for the main part of growth, explains Lars Wollung.
Few experience a recovery
Very few of the European business leaders surveyed in the 2014 EPI see signs of recovery. 72 per cent of the respondents said that they have felt no positive impact of an economic recovery in the last three months. And that lack of hope goes for a majority of respondents in all 31 countries. In Iceland only one per cent and in Sweden two per cent of the business managers say they have felt any positive impact of a recovery. The lack of positive signs goes for Hungary, two percent, and Serbia, three per cent, where business managers said that they have felt any positive impact. While business leaders in Lithuania, where 44 per cent said that they have seen signs of economic recovery, are more positive. In Denmark 37 per cent, The Netherlands 36 per cent, Estonia and Spain both 30 per cent said that they felt signs of a general economic recovery.
In the report Intrum Justitia lists what measures businesses can take in order to improve their cash flow and prevent bad debt losses:
About Intrum Justitia European Payment Index
The survey was conducted simultaneously in 31 European countries between January and March 2014. The survey was conducted in written form. The questionnaire was translated into the respective national languages. Dispatch and return of the questionnaires was carried out on a decentralised basis by the countries concerned, whereas the analysis was carried out centrally in accordance with pre-determined guidelines. All information has been verified and uncertainties were not included in the evaluation. Furthermore, all anonymously sent questionnaires were not taken into account for the final evaluation. Companies in UK, Ireland, Greece, Cyprus, Lithuania, Latvia, Serbia, Bosnia, Russia and Turkey were also questioned on-line by a specialised company (BING Research).
For further information, please contact:
Lars Wollung, President & CEO
Phone: + 46 8 546 102 02
Madeleine Bosch, Head of EPI Research, Intrum Justitia
Mobile: +31 64 6212 579
President & CEO
Intrum Justitia AB
Phone: +46 (0)8 546 102 02
Head of EPI Research
Intrum Justitia AB
Mobile: +31 (0)64 6212 579
Intrum Justitia is Europe’s leading Credit Management Services (CMS) group and offers services designed to measurably improve clients’ cash flows and long-term profitability, including purchase of receivables. Founded in 1923, Intrum Justitia has some 3,600 employees in 20 countries. Consolidated revenues amounted to around SEK 4.6 billion in 2013. Intrum Justitia AB has been listed on NASDAQ OMX Stockholm since 2002. For further information, please visit our webpage.