Overview of payment practices

By industry

Agri-food

Late payments in the agri-food industry in Greece affect

  • Late payments in the agri-food industry in Greece affect 50% of the total value of B2B invoices (significantly up from last year’s 29%). 50% of respondents reported having to wait longer to cash in overdue invoices, up to 34 days on average. For 42%, there was no change in the average invoice-to-cash turnaround, while only 8% cashed in overdue invoices earlier than they did before the pandemic.
  • Average DSO increases of up to 10% were reported by 50% of the industry (regional average: 57%). 44% reported increases of above 10% (regional average: 35%). Currently DSO stands at a 70-day average (well above the 108-day average for Western Europe).
  • 56% of businesses told us they experienced cash flow difficulties due to the economic downturn. 29% reported no impact at all (regional average negative impact: 37% and no impact 36%).
  • To safeguard liquidity levels, 52% of respondents delayed payments to their own suppliers (regional average: 45%) and 48% enacted hiring freezes (compared to 27% in the region).

Approach to credit quality assessments

  • After the start of the recession, the industry told us they requested credit information directly from their customers more often than before. The most frequently used sources for credit assessments are now information provided by the customer alongside its financial statements.
  • The Greek agri-food industry prioritises evaluating the customer’s past payment history. However, the majority of businesses polled told us they plan to evaluate the customer’s financial flexibility more frequently over the coming months.

Approach to credit management

  • Following the economic downturn, businesses requested either cash payment or payment guarantees more frequently. They also sent outstanding invoice reminders more often than before the pandemic. Over the coming months, they told us they plan to practise self-insurance or use trade credit insurance to protect their business against bad debt.
  • 56% believes their customers’ creditworthiness will improve over the next six months, 15% anticipate deterioration while the remainder believe there will be no change. This compares with 54% of respondents in the region expecting improvement and 15% expecting deterioration.
  • 50% of businesses consider the effective collection of outstanding invoices to present the greatest challenge to profitability in 2021. This compares to 45% with the same concern at regional level.

2021 industry outlook

  • 58% of respondents expect the domestic economy to improve over the next six months (regional average: 57%). 33% expect it to get worse (regional average: 27%). 46% expect the global economy to grow, 42% expect it to decline. 50% foresee improvement in international trade while 33% anticipate deterioration. These opinions are consistent with those expressed by the industry at regional level.

Chemicals

Late payments and cash flow

  • Late payments affect nearly 50% of the total value of B2B invoices issued by respondents in the chemicals industry in Greece (significantly up from last year’s 30%). 41% of respondents reported having to wait longer to cash in overdue invoices, up to 21 days on average. 46% reported no change in the average invoice-to-cash turnaround, while the remainder cashed in overdue invoices earlier than they did before the pandemic.
  • Average DSO increases of up to 10% were reported by 41% of respondents, while 48% reported increases of more than 10%. Currently DSO stands at a 40-day average (over half of with the 83-day regional average).
  • 48% of businesses told us that their cash flow was negatively affected after the outbreak of the pandemic (higher than the 39% average for the region). 39% reported a no impact (regional average: 40%).
  • To avoid liquidity shortages, businesses most often delayed payments to their suppliers or increased the amount of time, costs and resources spent on chasing unpaid invoices (38% of respondents for each).

Approach to credit quality assessments

  • After the economic downturn, businesses in the industry sourced credit information directly from their customers more frequently. This now complements customer financial statements and bank references, which remain the most used information sources for assessments of creditworthiness.
  • The industry prioritises evaluating their customers’ financial flexibility and past payment history. This, along with the customers’ profitability, will be the key indicators businesses plan to monitor over the coming months.

Approach to credit management

  • The Greek chemicals industry told us they relied on payment guarantees more often following the economic crisis, while many began practising self-insurance to protect their business against customer payment default. Over the coming months, 62% of respondents in the industry told us they plan to request payment guarantees more often than they did last year and to speed up the debt collection process.
  • 67% of businesses expect their B2B customers’ creditworthiness to improve in 2021 (significantly higher than the regional average of 49%). 15% expect deterioration (regional average: 22%).
  • 48% considers containment of costs to present the greatest challenge to profitability in 2021 (regional average: 39%). Maintaining adequate cash flow ranks second (reported by 44%, higher than the 41% regional average for the industry).

2021 industry outlook

  • 54% expects the domestic economy to improve over the next six months (regional average: 58%). This is significantly more than the 32% expecting it to get worse (regional average: 29%). 46% expects the global economy to improve while 39% expects it to deteriorate. A brighter outlook for international trade is anticipated by 54% of respondents in the industry, compared to 33% who are pessimistic in this regard.

Consumer durables

Late payments and cash flow

  • Late payments in the Greek consumer durables industry affect 48% of the total value of B2B invoices (this is double compared to last year). 51% of respondents reported having to wait longer to cash in overdue invoices, up to 25 days on average. 39% reported no change in the average invoice-to-cash turnaround, while the remainder cashed in overdue invoices earlier than they did before the pandemic.
  • Average DSO increases of up to 10% were reported by 47% of consumer durables businesses. Increases of more than 10% were reported by 39% of businesses. Currently DSO stands at a 46-day average (lower than the regional average of 61 days).
  • 75% told us their revenue was negatively affected by the pandemic (regional average: 49%). 13% reported no impact. A similar pattern was seen with cash flow with 69% reporting ill effects (regional average: 42%) and 14% saying they had experienced no impact.
  • To safeguard liquidity levels and contain operating costs, 59% of respondents delayed payments to their own suppliers (regional average: 32%) and 57% enacted hiring freezes (compared to 26% in the region).

Approach to credit quality assessments

  • Following the onset of the economic crisis, the most commonly used credit information sources in the industry now include: customers’ financial statements, bank and trade references, and credit information obtained directly from customers.
  • The industry prioritises evaluating customers’ past payment histories, alongside profitability and financial flexibility. Survey respondents say this approach will remain unchanged over the coming months.

Approach to credit management

  • The industry told us their credit management practices now chiefly include the offering of discounts for early payment of invoices and requests for payment in cash (reported by 55% and 78% respectively). Over the coming months, they plan to continue with this approach in addition to more frequent adjustment of payment terms.
  • 47% of industry respondents in Greece (regional average: 50%) believe their B2B customers’ creditworthiness will improve over the coming months. 39% believe it will deteriorate (regional average: 23%).
  • 55% of respondents in the industry believe that the continuation of the economic crisis presents the greatest challenge to profitability in 2021 (regional average: 26%). Fall in demand (reported by 43%) and containment of costs (also reported by 43%) rank second (regional average 36% and 49% respectively).

2021 industry outlook

  • The industry is pessimistic about the outlook for the domestic economy over the coming months, with 53% believing it will deteriorate and 37% it will recover. The same goes for the outlook for both the global economy (53% optimistic, 39% pessimistic) and international trade (53% optimistic, 37% pessimistic).

Services

Late payments and cash flow

  • Late payments in the Greek services sector affect 47% of the total value of B2B invoices (compared to last year’s 27%). 64% of respondents reported having to wait longer to cash in overdue invoices, up to 21 days on average. For 21%, there was no change and 4% reported cashing in overdue invoices earlier than before the pandemic downturn.
  • Average DSO increases of up to 10% were reported by 53% of businesses. Increases of more than 10% were reported by 43% of businesses. Currently DSO in the sec- tor stands at a 56-day average (well below the 92-day average for the sector in Western Europe).
  • 39% of the businesses polled told us they experienced cash flow difficulties due to by the economic crisis (regional average: 44%). 68% said that revenue was negatively impacted (regional average: 54%).
  • 46% of respondents delayed paying suppliers (regional average: 38%). 43% enacted hiring freezes (regional average: 32%).

Approach to credit quality assessments

  • After the onset of the economic crisis, the most commonly used credit quality assessment sources in the industry now include: customers’ financial statements, information provided directly by the customer and bank references.
  • Businesses in the sector prioritise evaluating the customer’s profitability, past payment history and financial flexibility. Survey respondents say they will retain this focus over the coming months alongside evaluating customer debt capacity.

Approach to credit management

  • Following the onset of the economic crisis, the sector’s primary credit management practices now include: requests of payment in cash (64% of respondents) and outstanding invoice reminders (57%). Over the coming months, businesses told us they plan to continue with this approach alongside regular revision of payment terms.
  • 46% of sector respondents believe their B2B customers’ creditworthiness will improve over the coming months (regional average: 48%). In contrast, 39% believe it will deteriorate (regional average: 28%).
  • According to 53% of the businesses in Greece, maintaining adequate cash flow presents the greatest challenge to profitability in 2021 (higher than the 43% in the region). This is followed by fall in demand (cited by 46%, compared to 36% in the region).

2021 industry outlook

  • The services sector is divided about the outlook for the domestic economy over the coming months; 50% told us they expect improvement and 50% deterioration. A brighter outlook is largely anticipated for the global economy (50% optimistic, 42% pessimistic). 54% expressed opti- mism for the potential growth of international trade with just 32% expressing pessimism.

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