Intrum report: Estonian business suffers from epidemic of late payments

Newly released Intrum’s annual European Payment Report – a survey of 11 000 companies across 29 countries – shows that 86% of Estonian businesses have been asked to accept longer payments than they feel comfortable with over the past twelve months. The number of businesses receiving requests to extend the payment terms has increased from 81% in 2021.

Companies are expecting a significant jump in late payments this year. In Estonia, it takes on average 55 days to receive the payment from the customers, slightly above the European average of 54 days. The payment gap between the terms offered and actual payment received has remained relatively the same for B2C and B2B segments, but significantly increased for payments from the public sector.

According to Ilva Valeika, managing director at Intrum Baltics, if European businesses are to weather the economic storm and unlock growth, then securing payments in a timely fashion will be crucial. „Unfortunately, across much of Europe, a late-payments culture persists. The European Commission has warned that just four in 10 EU businesses are paid on time, and that late payments are a factor in a quarter of SME bankruptcies. In EPR 2022, we see a connection between prompt payments and a business’ ability to grow. Two-thirds of respondents in Europe believe they could expand their products and service operations if they were paid more quickly by their customers. Almost half say faster payments would allow them to hire more employees,“ said Valeika.

Throughout Europe, entrepreneurs admit that they lack the agility and expertise to manage the impact of late payments on their business and growth plans. The majority (62%) of Estonian businesses admit that their debt accounting systems are outdated, well above the European average of 46%.

Six in 10 European businesses are worried that the risk of late payments will grow this year, largely because of inflation and regulation. On average, businesses in Baltic countries, more often than firms in other European countries, accept longer payment terms both to avoid the risk of clients going bankrupt and not to damage customer relationships. Small and medium enterprises in Estonia less often than the large corporations agree on changes in payment terms: one in five (20%) SMEs do not negotiate payment terms, while only 15% of large corporations state the same.

European Payment Report by Intrum was released on June 21st and is available here: www.intrum.ee/epr2022.

About Intrum

Intrum is the industry-leading provider of Credit Management Services with a presence in 24 markets in Europe. Intrum helps companies prosper by offering solutions designed to improve cash flows and long-term profitability and by caring for their customers. To ensure that individuals and companies get the support they need to become free from debt is one important part of the company’s mission. Intrum has more than 10,000 dedicated and empathetic professionals who serve around 80,000 companies across Europe. Intrum is headquartered in Stockholm, Sweden and the Intrum share is listed on the Nasdaq Stockholm exchange.

For further information, please visit www.intrum.com