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Hamburg, Germany, October 6, 2022

  • Almost one in four invoices in Europe is paid late or not paid at all 
  • Payment practices in Germany the best in Europe
Since 2019, payment practices in Europe have deteriorated, i.e., there has been an increase in the proportion of late and unrecoverable receivables. This development is causing around one in five companies to worry about their viability. In Germany, on the other hand, a different picture emerges: Payment practices in Germany have been consistent since 2019, and even after three years are still the best in Europe. This was one of the insights from the EOS Survey “European Payment Practices”, which polled 3,200 companies in 16 European countries. 

Although companies had granted them longer payment terms, 14 percent of customers in Germany still paid their invoices too late or did not pay them at all. According to this result, Germany is in a much better position than the average European company. Because compared with the 2019 survey, which revealed that 19 percent of invoices in Europe were paid late or not paid at all, this figure had risen to as much as 21 percent by the latest survey in 2022. With the exception of Germany and Belgium, the same trend emerges when comparing countries in Western Europe. The proportion of late or unrecoverable payments in Germany has remained constant since 2019, while in Belgium it declined from 20 to 18 percent. These are the lowest values in Europe. 

European companies stated that as a result of these payment delays, the main issues that they struggled with were their own liquidity bottlenecks (42 percent) and profit shortfalls (51 percent). As a result, around a third of companies had to reduce their investments (30 percent) and raise prices (28 percent). Accordingly, companies have a bleak view of the future. 24 percent of respondents in Germany, and in Europe overall, assume that payment practices are going to get worse.  “It is concerning that payment practices have deteriorated significantly, especially because in the light of the current economic figures and high inflation we have to expect a further decline in payment behaviour,” says Marwin Ramcke, CEO of the EOS Group.

Professionalization in receivables management can protect liquidity

More and more companies are working with external receivables management service providers to recover debts. This is the case in Germany as well, where 35 percent of companies process receivables both in-house and using external service providers. Ten percent of companies have even outsourced their receivables management completely to external service providers. And these partnerships are proving successful: On average, companies can recover about 6 percent of their revenue by working with external service providers. The 6 percent of revenue recovered in Germany puts it in line with the European average. “Lack of liquidity is one of the most common causes of insolvencies and loss of jobs,” says Ramcke. Companies should therefore continue to professionalize their receivables management and look into working with external partners.

Digital payment methods as a key competitive factor  

At the same time, it is becoming increasingly important for companies to expand the digital payment methods they offer. In the last three years, there has been a significant increase in the availability of such options in both Western and Eastern Europe. Since 2019, the number of Western European companies offering digital payment methods has increased by 14 percent to 46 percent. The payment method “Buy Now, Pay Later” (BNPL) is also gaining ground: Four out of ten European companies regard this payment method as the new credit card and a “must” in the range of payment options offered. Around 38 percent of the companies surveyed in Germany believe that in future, offering BNPL will actually be indispensable for consumers and companies. 

About the EOS Survey “European Payment Practices” 

In partnership with independent market research institute Kantar, EOS used phone interviews with 3,200 companies in 16 European countries between March 4 and April 19, 2022, to ask them about the prevailing payment practices in their respective locations. In the spring of 2022, 200 companies (each with an annual turnover of more than EUR 5 million) in each of the countries Belgium, Bulgaria, the Czech Republic, Croatia, Denmark, France, Germany, Greece, Hungary, Poland, Romania, Slovakia, Slovenia, Spain, Switzerland, and the UK answered questions about their own payment experiences and current issues relating to risk and receivables management. This is the 13th time that EOS has conducted the survey.

About the EOS Group

The EOS Group is a leading technology-driven investor in receivables portfolios and an expert in the processing of outstanding receivables. With over 45 years of experience, EOS offers some 20,000 customers in 25 countries around the world smart services for all their receivables management needs. Its key target sectors are banking, real estate, telecommunications, utilities and e-commerce. EOS employs more than 6,000 people and is part of Otto Group.

For more information on EOS Group, please go to: eos-solutions.com
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