Overview of payment practices

By industry

Agri-food

Late payments and cash flow

  • Late payments in the Dutch agri-food industry affect 54% of the total value of B2B invoices (significantly up from last year’s 31%). Due to the economic crisis, nearly 30% of respondents in the industry reported having to wait longer to cash in overdue invoices, up to 10 days on average. For 66%, there was no change in the average invoice-to-cash turnaround, while only 4% cashed in overdue invoices earlier than before the pandemic.
  • Average DSO increases of up to 10% were reported by 62% of the Dutch agri-food industry. 36% reported increases of above 10%. Currently DSO in the industry stands at a 156-day average (well above the 108-day average for the industry in Western Europe).
  • 43% of the Dutch agri-food industry told us their cash flow was positively affected by the pandemic downturn. 21% reported liquidity shortages. This contrasts with the industry at regional level, where 37% reported a negative impact on cash flow and 27% told us that their cash flow remained unaffected.
  • 43% of agri-food businesses delayed payments to suppliers, and 43% increased the amount of time and resources spent on chasing unpaid invoices.

Approach to credit quality assessments

  • After the onset of the economic crisis, the Dutch agri-food industry changed the way they approached credit checks, sourcing information directly from B2B customers more often than before the pandemic. Customer information, financial statements, and bank and trade references are now the most common sources for creditworthiness assessments in the industry.
  • Agri-food businesses in the Netherlands give priority to evaluating customer financial flexibility, ability to generate cash and profitability. The majority of the industry reports that they will continue to monitor these areas over the coming months.

Approach to credit management

  • Following the onset of the economic crisis, the Dutch agri-food industry intensified efforts to reduce the impact of payment default by requesting payment guarantees, cash payments and practising self-insurance. Over the coming months, respondents in the industry told us they plan to make wider use of self-insurance and outstanding invoice reminders.
  • Respondents from the industry are optimistic about their B2B customers’ creditworthiness over the next six months. 43% expect improvement, while only 15% expect deterioration. This compares to 54% expecting improvement in Western Europe and 15% expecting deterioration.
  • 56% of the industry considers the greatest challenge to profitability in 2021 to be cost containment. This compares to 42% with the same concern at regional level.

2021 industry outlook

  • 52% of respondents in the Dutch agri-food industry expect the domestic economy to improve over the next six months (regional average: 57%). 22% expect it to get worse (regional average: 27%). The majority of businesses are optimistic about the outlook for the global economy (38% optimistic, 24% pessimistic) and international trade (34% optimistic, 27% pessimistic).

Construction

Late payments and cash flow

  • Late payments in the Dutch construction industry affect 47% of the total value of B2B invoices (up from last year’s 35%). As a consequence of the pandemic-triggered economic crisis, 42% of respondents reported having to wait longer to turn overdue invoices into cash, up to 14 days past the due date on average. For 58%, there was no change in average invoice-to-cash turnaround. No businesses cashed in overdue invoices earlier than before the pandemic.
  • Average DSO increases of up to 10% were reported by 75% of respondents. Increases of DSO above 10% were reported by 24% of businesses in the construction industry. Currently DSO in the industry stands at a 25-day average (significantly below the 70-day average for the industry in Western Europe).
  • 52% of the Dutch construction industry revealed that revenue levels were positively affected by the pandemic downturn. 39% reported a negative impact. This contrasts with the industry at regional level, where 49% reported revenue shortages and 25% said it was unaffected. A similar pattern can be seen with cash flow, with 36% of the industry in the Netherlands reporting no negative impact and 17% liquidity issues. At regional level this was again reversed 34% reporting a negative impact and 28% the opposite.
  • To avoid liquidity issues caused by late payments, the Dutch construction industry told us that they delayed payments to suppliers (59% of respondents, compared to 36% at regional level).

Approach to credit quality assessments

  • After the onset of the economic crisis, the Dutch construction industry changed the way they approached credit checks, sourcing information directly from B2B customers more often than before the pandemic. Customer information, financial statements, and bank references are now the most common sources for creditworthiness assessments in the industry.
  • Construction businesses in the Netherlands give priority to evaluating customer financial flexibility and ability to weather unexpected shifts in the economic and business environment. The majority of the industry reports that they will continue to monitor these areas over the coming months.

Approach to credit management

  • Following the onset of the COVID-19 economic crisis, survey respondents in the Dutch construction industry told us they strengthened their credit management practices by: sending outstanding payment reminders more frequently, requesting letters of credit more often, and resorting to self-insurance. Looking ahead, businesses told us they plan to increase the use of reminder letters and to practise self-insurance.
  • 63% of respondents from the Dutch construction industry expect their B2B customers’ creditworthiness to improve over the coming months (regional average: 48%). 10% expect it to get worse (regional average: 17%).
  • According to the Dutch construction industry, the greatest challenge to profitability in 2021 is maintaining adequate cash flow. This was reported by 66% of respondents, compared to the regional average of 47%.

2021 industry outlook

  • 77% of respondents in the Dutch construction industry expect the domestic economy to improve over the next six months. Significantly more than the 6% that expect it to get worse. The majority of businesses are optimistic about the outlook for the global economy (53% optimistic, 28% pessimistic) and international trade (45% optimistic, 32% pessimistic)

Construction Materials

Late payments and cash flow

  • Late payments in the Dutch construction materials industry affect nearly 60% of the total value of B2B invoices (double compared to last year’s 30%). Due to the economic crisis, 56% of respondents reported having to wait longer to cash in overdue invoices, up to 15 days on average. For 44%, there was no change in the average invoice-to-cash turnaround. No businesses reported cashing in overdue invoices earlier than before the pandemic.
  • Average DSO increases of up to 10% were reported by 72% of construction materials businesses. Increases of DSO above 10% were reported by 28% of businesses. Currently DSO in the industry stands at a 93-day average (largely in line with the 91-day average for the industry in Western Europe).
  • 48% of the survey respondents in the industry (in line with the regional average) told us the pandemic-induced economic crisis had a negative impact on their revenue. 29% of respondents reported a negative impact on cash flow (compared to the 32% of respondents in the industry at a regional level).
  • To contain costs due to the increase in late payments, 39% of the Dutch construction materials industry laid off staff (regional average: 34%). To avoid liquidity shortages, 32% of the survey respondents told us they delayed payments to suppliers (regional average: 27%).

Approach to credit quality assessments

  • After the onset of the pandemic recession, respondents from the Dutch construction materials industry told us they did not change the way they approached credit assessments. They continue to rely on credit bureau reports, customer financial statements and payment records.
  • Priority is given to evaluating the customer’s ability to generate cash. Survey respondents say this approach will remain unchanged over the coming months, signalling the sector’s strong focus on customer liquidity levels.

Approach to credit management

  • Following the onset of the economic crisis, survey respondents in the Dutch construction materials industry told us they strengthened their credit management practices by: offering discounts for early payment of invoices and making wider use of trade credit insurance. Over the coming months, businesses told us they plan to increase the use of self-insurance.
  • 39% of respondents from the Dutch construction materials industry expect their B2B customers’ creditworthiness to deteriorate over the coming months (regional average: 28%). Just 29% expect to see an improvement (regional average: 39%) over the coming months.
  • According to the Dutch construction materials industry, the greatest challenges to profitability in 2021 are: containment of costs (reported by 50%), supply chain disruption (40%) and restriction to bank finance (36%).

2021 industry outlook

  • 60% of respondents in the Dutch construction materials industry expect the domestic economy to improve over the next six months. 20% expects it to get worse. The majority of businesses are pessimistic about the outlook for the global economy (26% optimistic, 31% pessimistic), although they have a brighter opinion about international trade (48% optimistic, 28% pessimistic).

Consumer Durables

Late payments and cash flow

  • Late payments in the Dutch consumer durables industry affect 57% of the total value of B2B invoices (compared to last year’s 30%). Due to the economic crisis, 64% of respondents reported having to wait longer to cash in overdue invoices, up to 26 days on average. For 25%, there was no change and 7% reported cashing in overdue invoices earlier than before the pandemic.
  • Average DSO increases of up to 10% were reported by 43% of consumer durables businesses. Increases of more than 10% were reported by 52% of businesses. Currently DSO in the industry stands at a 52-day average (below the 61-day average for the industry in Western Europe).
  • 69% of the Dutch consumer durables industry told us their revenue was positively affected by the pandemic downturn, significantly more than the 18% that reported a negative impact. This contrasts with the industry at regional level, where 50% reported a negative impact on revenue and 33% told us that it remained unaffected. A similar pattern was seen with cash flow with 79% reporting no ill effects and just 9% saying they had experienced a negative impact. This contrasts with the regional average where 42% reported a negative impact and 32% said there was no impact.
  • To manage the impact of late payments from their B2B customers, respondents from the Dutch consumer durables industry most often enacted hiring freezes, (as reported by 45% of businesses).

Approach to credit quality assessments

  • After the onset of the pandemic-led economic crisis, respondents from the Dutch consumer durables industry told us they made wider use of information provided directly by the customer about its credit standing. This is a change in the way they approached customer credit assessments and is now used alongside financial state- ments and bank references.
  • The Dutch consumer durables industry gives priority to evaluating the customer’s profitability, ability to generate cash and financial flexibility. Survey respondents say this approach will remain unchanged over the coming months, signalling the sector’s strong focus on customer liquidity levels

Approach to credit management

  • Following the onset of the economic crisis, survey respondents in the Dutch consumer durables industry told us that their credit management practices now include: self-insurance (77%) and offering discounts for early payment of invoices (30%). Over the coming months, businesses told us they plan to continue with this approach in addition to requests for payment guarantees.
  • 57% of industry respondents (regional average: 50%) believe their B2B customers’ creditworthiness will improve over the coming months. 27% believe it will deteriorate (regional average: 23%).
  • According to 66% of the Dutch consumer durables industry (twice as many as those at regional level), maintaining adequate cash flow presents the greatest challenge to profitability in 2021. This is followed by the effective collection of outstanding invoices (cited by 54%, compared to 44% in the region).

2021 industry outlook

  • The Dutch consumer durables industry is optimistic about the outlook for the domestic economy over the coming months (88% expect it to improve, 9% to get worse). The same goes for the outlook for the global economy (65% optimistic, 12% pessimistic) and for international trade (68% optimistic, 22% pessimistic).

Most businesses are positive about the outlook for 2021

Atradius Payment Practices Barometer – November 2020

Machines

Late payments and cash flow

  • Late payments affect nearly 62% of the total value of B2B invoices in the Dutch machines industry (a significant increase on last year’s 36%). 71% of survey respondents reported having to wait longer to cash in overdue invoices, up to 30 days longer on average.
  • Average DSO increases of up to 10% were reported by 12% of the Dutch machines industry, contrasting markedly with the 88% that reported increases of above 10%. Currently DSO in the industry stands at a 70-day average (below the 110-day average for the industry in Western Europe).
  • 59% of the Dutch machines industry revealed that revenue levels were positively affected by the pandemic downturn. 30% reported a negative impact. This contrasts with the industry at regional level, where 52% reported revenue shortages and 29% said it was unaffected. A similar pattern can be seen with cash flow, with 62% of the industry in the Netherlands reporting no negative impact and 14% acknowledging liquidity issues. At regional level this was again reversed with 42% reporting a negative impact and 32% the opposite.
  • To contain costs due to the increase in late payments, 60% of the Dutch machines industry told us they needed to increase the time, resources and money spent on chasing unpaid invoices (regional average: 43%).

Approach to credit quality assessments

  • Respondents from the Dutch machines industry told us that, following the onset of the pandemic recession, they relied on the credit information provided directly from the customer much more than before the pandemic. They combined this with checks on financial statements and bank references.
  • The Dutch machines industry told us that when assessing creditworthiness, priority is given to the evaluation of the customer’s debt capacity, profitability and financial flexibility. This approach will remain unchanged over the next six months.

Approach to credit management

  • Following the onset of the economic crisis, survey respondents in the Dutch machines industry told us that their credit management practices now include self-insurance and maximising efforts to speed up debt collection. Over the coming months, businesses told us they plan to continue with this approach in addition to requests for payment in cash.
  • 71% of industry respondents (regional average: 55%) believe their B2B customers’ creditworthiness will improve over the coming months. 11% believe it will deteriorate (regional average: 19%).
  • According to 58% of the Dutch machines industry (regional average: 44%), maintaining adequate cash flow presents the greatest challenge to profitability in 2021. This is followed by potential restrictions to bank finance (47%, compared to 30% at a regional level).

2021 industry outlook

  • The Dutch machines industry is overwhelmingly optimistic about the outlook for the domestic economy over the coming months (93% expect it to improve, 5% to get worse). The same goes for the outlook for the global economy (71% optimistic, 29% pessimistic) and for international trade (71% optimistic, 20% pessimistic).

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