Atradius Payment Practices Barometer – Survey Results for Asia – 2024
Overview
The Atradius Payment Practices Barometer is an annual survey focusing on B2B payment practices in various markets. This report provides insights into the challenges and risks faced by Asian companies in managing B2B payment behavior and the impact on cash flow.
Key Findings
1. Consistent vs. Changing Payment Behavior
- Nearly half of the surveyed companies report consistent B2B customer payment behavior compared to the previous year.
- The rest are split almost evenly between companies experiencing worsening and improving payment practices.
- An average of 46% of B2B credit sales are affected by payment delays, with Taiwan, Singapore, and Hong Kong being the hardest hit.
2. Late Payments and Financial Strain
- Persistent late payments indicate underlying issues needing attention.
- Bad debts now stand at an average of 4% of all B2B invoices, with Japanese companies particularly affected by additional financial strain.
3. Main Causes of Late Payments
- Cashflow problems among B2B customers are the primary cause, affecting 42% of businesses, notably in India.
- Inefficient payment processes are another major factor, especially in Taiwan, where invoices take an average of one month beyond the due date to be converted into cash.
4. Bridging Liquidity Gaps
- Many companies turn to external finance to bridge liquidity gaps, with 60% requesting supplier credit, especially in Vietnam and Indonesia.
- Others use bank loans and invoice discounting.
- Long-term strategies focus on stabilizing Days Sales Outstanding (DSO) through improved collection efficiency.
5. Credit Risk Management
- Approximately 50% of all B2B sales are transacted on credit, a figure unchanged from the previous year.
- Payment terms remain largely stable, though many businesses, especially in India, offer longer terms (average 43 days from invoicing).
- 78% of companies opt for a combination of in-house credit risk management and transferring the issue to an insurance company, with letters of credit widely used to protect export B2B transactions.
Summary
The survey highlights a complex picture of B2B payment practices in Asia, with persistent late payments and financial strain being significant issues. Companies are adapting by leveraging external finance and focusing on long-term strategies to improve cash flow. Effective credit risk management remains crucial for maintaining financial health and stability.
These key figures and charts provide further insights into the survey findings.
