Many suppliers to large and global corporate buyers face late payment from their customers. This practice has been common since the global financial crisis of 2008, but it’s far from new problem.
The 2016 Working Capital Outlook Survey from C2FO asked more than 1,800 small to medium-sized enterprises (SMEs) about their customers’ payment practices. Those in the U.S. reported that 14% of their customers often pay invoices later than expected (down from 20% in 2015). Unfortunately for SMEs in the U.K., their year-over-year trend was reversed: 20% of them have late paying customers today, compared to 11% in 2015.
SMEs in other European countries fare poorly as well, with 50% of respondents in Italy, 27% in France and 18% in Germany reporting routinely late payments from customers.
Why is this a problem? Other findings of the survey reveal some key statistics about the working capital landscape for SMEs: