Intrum’s annual European Payment Report – a survey of 11 000 companies across 29 countries – shows that late payments are hindering the growth of companies across European countries, hampering the economic and social development of the economy at large. Across the continent, 4 in 10 companies say that late payments are prohibiting growth of the company.
„Year on year, respondents increasingly see late payments as a significant barrier to growth. Most often, revised payment terms are offered, but compared to other firms in Europe Estonian businesses are more willing to offer a discount as an alternative,“ said Ilva Valeika, managing director at Intrum Baltics. According to Intrum’s report, data-driven decisions, such as using credit management software and/or payment records, are used only by 15% of Estonian enterprises.
Pre-payment is the respondents' main precaution against late payment for the second year in a row. Although debt management is a top priority, along with cash flow and credit risk, businesses are not taking all the steps available to them. Most European companies (73%) focus on early arrears, but a few use other options, such as investing in new technologies or building strategic partnerships. In Estonia, quite often (32%) a discount as an alternative is offered when a request for an extended payment term is received from a customer.
One in three (35%) Estonian businesses are working with debt collection agencies to improve their debt management, significantly more than in Europe on average (26%), as well as in Latvia (20%) or Lithuania (28%). “There are still a lot of options businesses are not fully using to receive due payments and get their finances back on track. While taking legal action is still relatively common, more and more companies are looking into the potential of working with debt collection agencies, creating strategic partnerships and digitalizing and investing in new technology in order to fight late payments,” says Valeika.
European Payment Report by Intrum was released on June 21st and is available here: www.intrum.ee/epr2022.
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