Study: Global Trade Credit Payments

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Find out Which Industries in Which Markets Paid Late in 2019 and Why

The 2020 Global Trade Credit Payments Study, by Dun & Bradstreet’s Worldwide Network Partner CRIBIS, outlines the international picture of payment practices in 38 markets around the world.

As seen in previous editions, the 2020 study showcases broad differences in payment practices and trends between markets, characterized by individual reactions to growing macroeconomic difficulties and the increasingly extensive credit crisis, which has hit economies around the world.

Trade Credit Payments Trends in the US 

The US payment situation in 2019 was stable compared with previous years, showing good performance in terms of punctual payments.

Almost 60% of companies are reported as paying on time, whereas 38% were paying up to 30 days late. The other payment segments are more or less stable compared with 2018 levels: 4% of US companies were reported as paying between 30 and 90 days late on average, whereas 2.8% demonstrated a rather critical management of payments - paying suppliers more than 90 days late.

In addition, the report showed companies with fewer than 5 employees were the best payers, with 60% in the punctual payment class. as company size increases, generally the percentage of “good payers” gradually decreases, A reason for this could be that as larger companies can exert more control over their terms and may be less sensitive to fluctuations in creditworthiness.

The Financial Services industry had the highest concentration of punctual payments (65.7%); followed by Agribusiness with 63.7% and Services with 58.3% of the total. Overall, the industry with the most severely delinquent payers (more than 90 days past due) came from Transportation and Distribution.

Trade Credit Payments Trends in the UK

The analysis of UK payments shows, for the first time, in 2019 performances close to the European average. The reported share of British companies paying on time was 43.8%, compared to European results of 44.3%.

Meanwhile, the majority of companies tended to pay between 1 and 30 days late (48.1%). Intermediate late payment classes (those paying 30-60 days late and 60-90 days late) account for 4.4%, whereas the severely delinquent “bad payers” account for 3.7% of the sample analyzed.

The variations between 2018 and 2019 were more significant: the share of on-time payers  increased by 9.1%; however, the number of cases with late payments (up to 90 days) decreased by 9.8%. If the picture of payments in 2019 is considered by late payment class and company size, there was a widespread tendency to pay between 1 and 30 days beyond agreed payment terms.

The Agribusiness industry had the highest concentration of punctual payments (62%); followed by Construction, with 54.9%, and Financial Services, with 47.7% of the total. Overall, the industry with the most severely delinquent payers (more than 90 days past due) came from Retail.

Conclusion: Diversity Among Payment Trends

In conclusion, what emerged for 2019 was a diverse picture, with very different trade credit payment scenarios between the markets under examination. International events, specific domestic patterns, industrial characteristics, and the business culture of each country contribute to diverse scenarios and trends, and in some cases patterns have changed course compared with previous years.

Macroeconomic forecasts maintain a certain negativity for this year, especially due to COVID-19 impact and still expect a period of critical risk for the different markets examined.

This means that through 2020, businesses will have to carry out thoughtful credit assessments  in order to sufficiently help safeguard their cash flow and quickly manage breaches in contract and late payments by customers and suppliers.

Methodology

The Global Payment Study was compiled by CRIBIS, the Dun & Bradstreet Worldwide Network Partner (WWN) in Italy, using data up to Dec. 31, 2019 (except Italy, which uses data up to March 31, 2020.) The WWN is an alliance between Dun & Bradstreet and leading business information providers in dozens of markets.

For each country the patterns of commercial transactions were analyzed in comparison with previous years. The main sources of information used in this study were payment data from the D&B Worldwide Network DUNTRADE program.

Click the link below for the comprehensive payment study on 38 markets: Austria, Belgium, Bulgaria, Canada, China, Croatia, Denmark, Egypt, Finland, France, Germany, Greece, Hong Kong, Hungary, India, Ireland, Israel, Italy, Lithuania, Luxembourg, Mexico, the Netherlands, Philippines, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovenia, Spain, Sweden, Taiwan, Thailand, Turkey, the UAE, the UK, and the US.

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