46% of European transport and storage companies are forced to accept payment terms longer than agreed

According to the 2016 Sector Payments Report published by Intrum Justitia

The consequences of late payments include additional interest costs, lost profits, and limited liquidity.

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The delays and payment terms In the very long term, it is one of the main risks that any company must face, and its consequences have a global impact on a country's economy.

 

This is a general problem, although some sectors suffer from this situation more than others. Specifically, the Transportation and Storage is one of the most affected in Europe And, in fact, 46% of companies are forced to accept payment terms that are longer than agreed upon. This is evident from the conclusions of the 2016 Sector Payments Report prepared by Intrum Justitia, a company specialized in credit management in Europe.

 

Beyond the sectoral data, the study delves into the consequences of this reality and concludes that late payment represents a real threat to the survival of companies in the sector: 43% of those surveyed assess this risk as "medium to very serious." Despite its significance, this risk is not the most serious, as 55% consider the additional cost of interest to be this serious. Loss of profits and liquidity constraints, both cited by 49% of companies, are other common consequences.

 

El employment promotion This is another area affected by delays and non-payments. Thus, 46% of organizations say that being paid on time would allow them to hire new talent. Furthermore, 35% of those surveyed point to the possibility that it could force them to lay off people.

 

 

46% of the companies surveyed stated that being paid on time would allow them to expand their workforce.

 

 

The costs generated by delays Payments are also significant: an average of 3,2% of transport and warehousing companies' annual revenue is written off, compared to 2,7% in other sectors. Furthermore, the situation shows no signs of improvement, as 91% admit that the risk of default in their company will increase or remain stable over the next twelve months.

 

On the other hand, although the economy of the Eurozone has begun to rebound, the sector Transportation and Storage The transport sector is still feeling the consequences of the difficult economic situation of recent years. Among the main reasons carriers cite to justify these delays are the financial difficulties of debtors, a reason cited by 73% of those surveyed. Intentional non-payment (67%) and administrative problems (48%) are also identified.

 

 European Directive against late payments

 

The entire European economy is negatively affected by payment delays. In order to protect businesses, especially SMEs, the European Union In February 2011, the European Commission adopted Directive 2011/7/EU on combating delays in commercial transactions. "Every year, many companies find themselves in financial jeopardy or forced to close their doors because they have not yet received their invoices. However, it is striking that 76% of companies in the Transport and Storage sector are unaware of the existence of this directive, which was enacted specifically to facilitate cash flow between companies," he states. Juan Carlos González, CEO of Intrum Justitia.

 

He also admits that "a thorough review of the Directive would be necessary, with the aim of promoting the circulation of credit and benefiting the development of a healthy and stable economy at the European level." He also applauds the recent decision of the European Union to launch a process of verification of the measures implemented by Member States to address the problem of late payments.