The European Payment Index (EPI) 2014, an annual survey of 10,000 businesses across 31 countries, has been published, this week, by Stockholm-based credit management service group, Intrum Justitia. This year’s index displays some very concerning reports about the realities of European business, with results clearly pointing to late payments as directly contributing to high-unemployment across the continent.
On average, 40 per cent of European business managers surveyed by Intrum Justitia stated that late payments have contributed to them not hiring this year; whilst, distressingly, 28 per cent say that the consequences of late payments have seen them having to dismiss employees. In Serbia, this figure reaches 59 per cent, and even in an economy like Germany, the figure is 35 per cent. The total bad debt loss for European businesses has risen to 3.1 per cent of overall revenues, equating to EUR360billion, and to the cost of 8 million jobs.
“European companies now have to write-off EUR360billion on a yearly basis, imagine if they had that to invest in their businesses,” said Lars Wollung, President and CEO of Intrum Justitia. “If all bills were paid on time it would add further jobs to our economy. We would all be better off.
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-sized enterprises, who, let’s not forget, account for the main part of our growth,” he said.
Of the 10,000 businesses taking part in the EPI 2014, 55 per cent have said they have experienced serious adverse issues as a result of late or non-payment of bills. Now in its tenth year, these are the worst figures the EPI has yet recorded, with 36 per cent of respondents believing their very existence is being threatened by late payments, and half of companies asserting that growth is being restricted.
Despite positive comments from governments and big businesses across Europe about an economic recovery, 72 per cent of companies surveyed in the EPI believe they have felt absolutely no positive impact from the upturn; with all 31 participating countries returning a majority verdict that the economic environment had simply not improved for them.
Late payment is an issue for many UK businesses, see our tips for introducing yours to a factoring company.
On average, 40 per cent of European business managers surveyed by Intrum Justitia stated that late payments have contributed to them not hiring this year; whilst, distressingly, 28 per cent say that the consequences of late payments have seen them having to dismiss employees. In Serbia, this figure reaches 59 per cent, and even in an economy like Germany, the figure is 35 per cent. The total bad debt loss for European businesses has risen to 3.1 per cent of overall revenues, equating to EUR360billion, and to the cost of 8 million jobs.
“European companies now have to write-off EUR360billion on a yearly basis, imagine if they had that to invest in their businesses,” said Lars Wollung, President and CEO of Intrum Justitia. “If all bills were paid on time it would add further jobs to our economy. We would all be better off.
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-sized enterprises, who, let’s not forget, account for the main part of our growth,” he said.
Of the 10,000 businesses taking part in the EPI 2014, 55 per cent have said they have experienced serious adverse issues as a result of late or non-payment of bills. Now in its tenth year, these are the worst figures the EPI has yet recorded, with 36 per cent of respondents believing their very existence is being threatened by late payments, and half of companies asserting that growth is being restricted.
Despite positive comments from governments and big businesses across Europe about an economic recovery, 72 per cent of companies surveyed in the EPI believe they have felt absolutely no positive impact from the upturn; with all 31 participating countries returning a majority verdict that the economic environment had simply not improved for them.
Late payment is an issue for many UK businesses, see our tips for introducing yours to a factoring company.
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