Payment practices report

November 2020: sectors practice credit caution amid 2021 optimism

Survey results for Austria

The Atradius Payment Practices Barometer is an annual survey that assesses business payment behaviour throughout the world. The survey explores a range of topics including payment terms, payment delays, credit sales and DSO (Days Sales Outstanding).

The survey provides us with the opportunity to hear directly from businesses and, this year, gives us insight into how businesses are coping with the COVID-19 pandemic and global recession.

In this report, you will find the survey results for Belgium.

Christophe Cherry,

Atradius Country Director for Belgium commented on the report

Actions taken by the Belgian government including a temporary freeze on insolvency proceedings and social assistance measures will have had a positive impact on many businesses following the start of the pandemic.

These actions may also be behind some of the more positive responses seen in the survey concerning customer creditworthiness and the economy next year.

Although nearly half of businesses in Belgium plan to expand their credit insurance programmes next year, many businesses reported they intend to rely on self-insurance. The level of risk this may carry will in part depend on how long the pandemic continues and how long the government will keep support packages in place.

Key takeaways

Businesses practise caution in approach to trade credit Although almost half of businesses in Belgium offer trade credit, the majority cap payment terms at a maximum of 30 days and have not increased this since the start of the pandemic.

Despite restrictions on terms, late payments surge The total value of overdue invoices increased from 26% last year to 47% following the onset of the pandemic. This represents an 81% year-on-year increase.

Supplier-customer communication grows during new approach to credit checks After the start of the pandemic, 42% of businesses began sourcing credit information directly from their customers more often than in the past (more than the regional average of 38%).

Businesses feel positive about customer creditworthiness, domestic and global economies Despite the uncertainties of the pandemic more businesses expressed optimism than pessimism about the outlook for their customers’ creditworthiness, domestic and global economies and international trade in 2021.

Just under half of businesses concerned about cost containment 48% of businesses in Belgium predict the greatest threat to business profitability in 2021 will be cost containment.

Signs of economic stress visible, although business confidence remains fairly strong

The Belgian economy was not in the strongest position when the pandemic took hold. It has been experiencing a slow down over the past few years and was relying on domestic demand to be the primary growth driver. With lock-downs and orders to stay at home, businesses in every area were affected although some, such as the construction industry, were hit harder than others. For example, following the onset of the pandemic, late payments impacted 63% of the total value of B2B invoices in Belgium’s construction industry and represented a dramatic increase from last year’s 23%.

The story is not entirely negative, however. Despite retail bearing the brunt of the downturn in many markets, the consumer durables sector in Belgium has to date been weathering the economic crisis fairly well.

Although the industry reported a large increase in late payments, businesses managed to keep DSO fairly under control at a 35-day average, much lower than the regional average of 61 days.

This year’s Payment Practices Barometer Survey took place after the pandemic had hit. Benchmarking the results and comparing them to last year’s have given us a valuable insight into how businesses are coping with the virus and with the downturn that followed. Looking ahead, the progression of the pandemic over the next six months will be critical for businesses. The majority of those polled in Belgium expressed confidence about domestic and economic growth next year.

Belgium: top 5 challenges to business profitability in 2021

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