Study on the consequences of late payments
SMEs have to wait too long for their money
In a study, Sage describes the impact of late payments on small and medium-sized enterprises (SMEs). In Germany, nine percent of all invoices from SMEs in the business-to-business sector are paid late every year. This means that payment is not made within the usual period of 30 or 60 days. As a result, companies lose 56 billion euros in cash flow. This is all the more dramatic as small and medium-sized companies traditionally work with a thinner capital base than larger companies.
Specifically, 30 percent of respondents in Germany state that they are experiencing or will experience the effects of late payments. In particular, they cite investments (17 percent), annual bonuses for employees (12 percent) and payment of suppliers (11 percent) as areas in which the effects are or will be felt. In addition, German SMEs spend an average of more than five man-days on the collection of late payments.
In view of the fact that small and medium-sized companies in Germany generate around half of gross value added and employ 55% of the workforce, the German economy as a whole is significantly affected. Nevertheless, many companies do nothing to demand payment of outstanding invoices because they do not want to jeopardize the customer relationship.
The good news from the study, which was carried out by the independent management consultancy Plum Consulting on behalf of Sage: More than 40 percent of late payers have no specific reason for the delay. Small and medium-sized companies therefore have a good chance of receiving due payments earlier by implementing stricter payment guidelines and systematically monitoring them. sw
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