How companies pay around the world
In this article we tell you the results of a macro study of payment behavior in the main markets of the world. We will tell you how companies pay by country, activity sector and size, and how the Covid19 crisis affected compliance with the established deadlines.
The report was prepared from the exclusive information of the different members of the Dun & Bradstreet Worldwide Network , an alliance of the best local business information providers, of which INFORMA is a part. This unrivaled local presence, in countries around the world, is the only way to ensure the complete, timely and accurate collection of business and financial information.
The data presented in this study come from the information contained in the DUNTRADE® PROGRAM and were prepared by CRIBIS D&B . Specifically, the payment evaluation is based on the analysis of those companies that have the D&B Paydex.
The Paydex code is a numerical indicator that evaluates the historical performance of payments to suppliers and provides a reliable profile of a company in terms of whether or not it is a good payer. The payment behavior of a company scores out of 100. Thus, a business that normally pays its invoices within the terms agreed in the contract will have a high Paydex Code and those that pay more slowly will have a lower Paydex Code.
The D&B Paydex score is only generated if there are at least three business experiences from three different vendors.
This is because it is an indicator that facilitates the average of the payment practices of the clients to be evaluated, and it needs to identify a trend and homogeneous observations, guaranteed by the use of a clear and correct definition of the payment experiences.
Payment experiences are generated by the combined analysis of all business transactions (invoices, payments, delays, etc.) between a client company and its supplier in the course of the previous 12 months. The score is a moving weighted average because:
- It comes from the analysis of 12 months of data
- It depends on the credit that is analyzed, that is, on the amounts of credit that are on time or late in a period.
- It is periodically updated.
Period and coverage
This Payment Study, prepared with data up to December 31, 2020, aims to outline the international panorama of payment practices, with special attention to the post-COVID-19 scenario.
Thanks to the Dun & Bradstreet Worldwide Network it was possible to collect and analyze payment data from China (mainland), Taiwan, Hong Kong, Philippines, Singapore, Thailand, India, Israel, United Arab Emirates, Mexico, United States, United States, Canada, Singapore, Belgium, Netherlands, Luxembourg, Germany, France, United Kingdom, Spain, Portugal, Ireland, Slovenia, Poland, Finland, Russia, Turkey, Greece, Bulgaria, Romania, Serbia, Croatia, Sweden, Hungary, Denmark and Egypt. For each market, trade transaction patterns are analyzed in detail, paying attention to changes compared to previous years.
Payment behavior in southern Europe
Infographic. Payment behavior in southern Europe
In this new edition of the Payment Study, twelve southern European markets have been compared. The differences between payments for the fourth quarter of 2019 and those updated to the fourth quarter of 2020 post COVID-19 were analyzed.
Hungary (66.6%), Turkey (58.3%) and Slovenia (49%) obtained the best results for payments on time in 2020. The worst results in delinquency (more than 90 days late) were registered in Greece (10.4%), Portugal (8.6%) and Romania (8.4%).
If we compare the installment payments of the second and fourth quarters of 2020, there is a worsening in Bulgaria (-1.8%), Greece (-1.3%) and Spain (-1.3%). In turn, Hungary (+ 3.1%) and Turkey (+ 2%) register an improvement in the percentages.
While compared to 2019 , the markets that showed the most significant negative changes in punctual payments were Romania (-7.2%) and France (-4.8%). On the other hand, the markets where they improved the most were Croatia (+ 6.2%), followed by Hungary (+ 3.3%) and Turkey (+ 2.8%).
By company size
Analyzing payment practices by company size, micro and small companies show the best payment behavior . As size increases, the percentages of payers in installment fall, reaching the lowest values in large companies.
- In Slovenia and Croatia , the highest percentages of installment payments are, however, among the largest companies .
- Hungary is the best payer in southern Europe. It has the highest percentage of on-time payments and the lowest delinquency rates.
- Slovenia is the best paying among large companies and has very low delinquency rates for all four company sizes.
- Turkey is very punctual among small businesses, but has one of the highest delinquency rates among micro (11%).
- In Spain , the good performance of payments in term of its micro-enterprises stands out (52.3%).
- The three markets with the most significant percentages of late payments of more than 90 days are Greece (13.3% among micro and 15.1% among large) and Romania (10.4% among small and 12.5%). % between medians).
By economic sectors
- Portugal and Romania , on the other hand, have the lowest percentages and never exceed 20%.
- Hungary (67.9%) has the best performance in Agriculture, forestry, hunting and fishing , followed by Turkey (65%) and Slovenia (52.7%).
- France performs very well in Construction (56%), Spain in Industry (45.6%) and Retail trade (47.1%).
- Italy registered a notable loss of -4.4% in Publishing Industry and -4.1% in Wood Industry .
- In Slovenia , the sectors that have had the most difficulties are Clothing and accessories stores (-10.1%), Health services (-8.6%) and Educational services (-7.6%).
- Spain recorded a loss of 11.6% in stores clothing and accessories , from 10.7% in transportation of passengers local and intercity and 10.5% in the field of catering and drinks of Hospitality .
- France had a poor performance in Post Office (-22.8%), in Health Services (-14.6%) and in Food and Beverage Services (-12.6%).
Payment behavior in Northern Europe
Eleven northern European markets have been compared, analyzing the differences between payments in the fourth quarter of 2019 and those of the fourth quarter of 2020 post COVID-19.
Denmark (88.6%), Poland (76%) and the Netherlands (75%) had the best results for payments on time in 2020. While the worst results for delinquencies (more than 90 days) were registered in Russia ( 6.1%), United Kingdom (4.1%) and Poland (3.3%).
Comparing the changes between the second and fourth quarters of 2020 in installment payments , important differences are observed between the countries analyzed. While compliance declines in Sweden (-7.5%) and Luxembourg (-2.3%), significant improvements are observed in Finland (+ 4.1%) and Russia (+ 2.4%).
If we consider the 2019 data , the markets that showed the most significant negative changes in punctual payments were Ireland (-18.1%) and Poland (-2.7%). On the other hand, those who experienced the best compliance results were the Netherlands (+ 5.8%), followed by Finland (+ 4.9%) and Belgium (+ 2.8%).
By company size
Although micro and small companies are the best payers in general terms, in this region too, the same situation is not registered in all countries.
- Very good payment behavior is observed for micro (90.3%) and small (87.7%) companies in Denmark , the best payer in Northern Europe.
- The Netherlands exhibits a significant gap between the payment compliance of micro (79.6%) and large (31.8%) companies.
Ireland is a curious case: large companies (30.3%) meet deadlines in a higher proportion than micro (28.3%).
By economic sectors
- The best deadlines in Agriculture, forestry, hunting and fishing are in Denmark (93.8%), the Netherlands (81.4%) and Poland (74.4%).
- Denmark and the Netherlands stand out as the best performing countries in installment payments across all sectors.
- Ireland, on the other hand, has the lowest percentages and never exceeds 39.9%.
- Germany is one of the leading countries in meeting deadlines in Construction (71.2%), Wholesale Trade (64.1%) and Retail (70.1%).
- Poland obtained outstanding results in the field Industrial , Transportation and Distribution , Financial Services and Services .
- Finland registered a notable fall of -6.1% in the Paper industry and -2% in Manufacture of other non-metallic mineral products.
- In Germany , the sectors that have had the most difficulties are Real Estate (-8.4%), Associative activities (-6.5%) and Activities of insurance agents and brokers (-6.3%).
- The United Kingdom recorded a loss of -6.7% in the Depository Institutions sector and -4.9% in Educational Services .
- In the Netherlands , they showed a notable variation in relation to the previous year: Public Administration (-27%), Chemicals and related products (-20.9%) and Rubber and various plastics (-19.7 %).
- In Poland , Leather and leather products (-7.4%), Agricultural services (-6.8%) and Clothing and other textile products (-6.4%) are the sectors that have suffered the most.
Payment behavior in North America
Three North American markets have been compared, analyzing the differences between the payment practices of December 2018, December 2019 and those updated to December 2020 post COVID-19.
At the end of 2019 , the percentages of companies that paid on time were: 54.9% for the United States, 31.3% for Canada and 49.9% for Mexico . While, after the COVID-19 pandemic , punctual payments have decreased for Canada and Mexico: 31% and 48.8% respectively. In contrast, in the US, one-time payments have risen to 55.7%.
As of December 2020, the share of “ bad payers ” (more than 90 days) reached values of 3% for the US, 1.4% for Canada and 1.3% for Mexico . There are no relevant changes compared to previous years, except for Mexico, which almost doubled its percentage compared to the fourth quarter of 2019.
By company size
By company size, also in this region, micro and small companies show the best payment behavior.
- Payment performance is very good for the US . in the micro and small
- The small , medium and large businesses Mexico are the best paid in time between the three markets of North America.
- Canada is not as punctual as the other two, but it has delinquency rates more than 90 days away from the lowest .
- The United States shows the highest percentages in payment delays of more than 90 days for micro and small .
By economic sectors
- Mexico is the best performer in Agriculture, forestry, hunting and fishing (69.1%), Mining (44.8%), Construction (70.3%), Industry (41.5%) and in the Wholesale sector ( 48.7%).
- UU . It is the leader in Transportation and Distribution (50.8%), Retail Trade (49.4%), Financial Services (66.7%) and in Services with 58.5%.
- In Canada, the best payment behavior is in Agriculture, forestry, hunting and fishing (50.5%)
- UU. Posted a loss of -5.1% in remarkable distribution by pipeline fuel , except natural gas, and -3.8% for both Deposit institutions as Environmental Quality and Housing .
- In Canada , the sectors that have had the most difficulties are Legal Services (-4.8%), Health and Personal Services (-3.9% and -3.7%).
The sectors with the worst performance deterioration for Mexico are Real Estate (-11.3%), Hotels and other places of lodging (-11.1%) and Recreation and recreation services (-10.2%).
Payment behavior in Asia
Nine Asian markets have been compared, analyzing the differences between their payment returns. This analysis covers the period from Q4 2018 to Q4 2020 after COVID-19.
In the Asian area, the best percentages of punctual payments in the fourth quarter of 2020 are recorded in Taiwan with 72.5% of companies paying in installment (-2.6% compared to the fourth quarter of 2019), the Philippines with 56% (+ 12.7%) and Thailand with 54.8% (+ 1%).
In the remaining markets, a majority of companies are registered that pay “up to 90 days” and “more than 90 days” after expiration. For the first group, the highest values belong to Israel (80.3%) and Hong Kong (69.8%), while the markets that show the highest delinquencies are the Philippines (22.9%) and China (Mainland) that increases its delinquency reaching 17.9%.
China (mainland) shows a negative trend : payments in time register a decrease of -1.1% and payments beyond 90 days reach + 3.9%, compared to the fourth quarter of 2019.
By company size
- Here, too, micro-enterprises show the best payment behavior and, as size increases, the percentage of punctual payers decreases.
- The micro and small enterprises in Thailand and the Philippines are very specific .
- Israel has the lowest percentages in installment payments .
- The UAE and India have good records among large companies and lower percentages in micro and small companies.
By economic sectors
- Taiwan and Thailand show the best percentages of punctual payments for practically all the sectors investigated.
- Thailand presents the best payment behavior in Financial Services (64.8%) and the lowest in Construction (46%).
- India registers the best trend in Agriculture, forestry, hunting and fishing with 59.3%.
- The Philippines is the most punctual in the Construction sector and has good results also in Commerce .
- China (mainland) does not have very specific habits : the greatest difficulties are manifested in Wholesale trade (21.1%), Industry (18.9%) and Retail trade (18.6%).
- China (Mainland) registered a notable loss of -9.4% in Stone, Clay and Glass Products , -7.6% in Publishing Industry and -7.2% in Paper Industry .
- In Israel, the sectors that have had the most difficulties are Hotels and other places of accommodation (-8.3%), Personal services (-7.4%) and General merchandise stores (-6.2%).
- Thailand recorded a loss of -5.3% in Wood Industry , -3.8% in Furniture Industry and -3.2% in Electronics and electrical equipment .
Payment behavior in Africa
Infographic. Payment behavior in Africa.
For the African area, the only market analyzed is Egypt . At the end of 2019 the percentage of companies that paid on time was the 38.1% and those with delinquencies on 18.7% of the total.
At the end of 2020, punctual payments fell to 33.7% (-4.4%) while a large number of companies ( 44.7% ) paid more than 90 days late.
Considering payment practices by company size , medium-sized companies show the best payment behavior (41%), followed by large companies (35%).
The micro have the highest percentage of payments over 90 days delay (23%).
By economic sector , the best percentages of installment payments correspond to General Trade (49%) and Retail Trade (48.5%), followed by Industry (34.8%) and Financial Services (34.5%).
On the other hand, mining with 47.3% in payment delays over 90 days has the worst behavior .
Construction and Services also presented difficulties in payments with 31.3% and 26.1% of payers with serious delays.