Payment practices report

June 2021: signs of market stress among businesses

The Atradius Payment Practices Barometer is an annual review of business-to-business payment behaviour. This year’s survey explores a range of topics including payment terms, payment delays, credit sales, and DSO (Days Sales Outstanding), results of which provide a good indication of outlook for businesses in Singapore.

Maria Sandhu,

Country Manager for Singapore commented on the report

Successful businesses will take steps to protect their accounts receivable through 2021. However, on the whole, business confidence remains fairly buoyant in Singapore and, as long as

the pandemic can be controlled, this sense of optimism should be replicated in the health of trade flows and invoice payments.

Introduction

As the Singaporean government continues to phase out the temporary fiscal measures introduced to support industries through the pandemic, local businesses appear to be very receptive to the use of customer credit riks managment tools aimed at protecting accounts receivable from the risks associated with the 2021 projected uptick in insolvencies.

The Atradius Payment Practices

Barometer provides us with the valuable opportunity to hear directly from businesses how they are coping with changed trading and economic circumstances caused by the pandemic. The survey questionnaire was completed by businesses in Singapore during Q2 2021, a full year after the World Health Organisation declared Covid-19 a global pandemic.

Key takeaways from the report

Acting as the main transport and financial services hub for Southeast Asia, Singapore punches well above its weight in the global economy. However, the city-state’s leading status has also meant it has been vulnerable to pandemic-induced supply chain disruptions and global demand contractions.

Our Payment Practices Barometer survey point to some evident signs of market stress among Singaporean businesses. These include a reported increase in bad debts and an in late payments from B2B customers. As a consequence businesses in Singapore

told us they were worried about maintaining adequate cash flow over the coming months. However, Singapore is one of the world’s strongest economies and a strong rebound is projected for 2021. What remains to be seen is the full impact of the removal of government support over the course of this year, particularly in terms of customer credit risk trend. Within an environment of increased risk, successful businesses will take steps to protect their account receivables and with these the profitability of the business.

Key survey findings for Singapore

  • Singapore sells on credit terms more often than any other economy in Asia, most often to gain a competitive edge
  • Payment terms offered by Singaporean businesses did not change significantly over the past year
  • Late payments affect over half of all B2B sales
  • Businessess who do not outsource collections observe more bad debt challenges
  • Liquidity issues and cost containment top future business concerns
  • Looking ahead, businesses in Singapore appear to be far more optimistic than Asian peers as to improvement in business performance chiefly stemming from domestic economic rebound

Interested in getting to know more?

For a complete overview of the payment practices in Singapore and in the local agri-food, chemicals/pharma

and construction industries, please download the complete report.

Download the report

If you have any questions about protecting your receivables send us a message so we can try and address your specific needs.

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