Debt Payment Practices in Europe Show Varying Growth Rates: Survey

The national economies of Greece, Poland, Romania and Russia are growing dynamically – but in some cases under very different conditions and with their own special cultural characteristics, as is clearly demonstrated by the payment terms and practices in the different countries. This is just one of the findings of the EOS Group‘s four-nation survey of "Payment practices in Europe" in 2007.

In the survey, conducted in October 2007, EOS and the independent market research organization Ipsos asked 200 companies in Greece, Poland and Russia respectively, and 45 in Romania, about the prevailing payment practices in their countries.

Greece: Relaxed payment terms
In Greece, the average level of outstanding debts as a proportion of total sales is 25%. More than a quarter of the companies surveyed say that the average receivable per debtor amounts to more than EUR 10,000. Since the Greeks also set long credit terms (105 days on average), liquidity may be lacking in other areas. Few companies expect the situation to improve in the future, while 35% even anticipate a further deterioration in payment practices.
 
Poland: Sticking to payment deadlines pays off
On average, 9% of Polish invoices are paid on time. At just 10% of sales, however, the level of outstanding debts there is considerably lower than that of companies in Russia, Greece and Romania. Poles allow just 37 days to pass between the expiry of the credit term and receipt of payment. More than two-thirds of Polish companies employ their own credit manager, while 75% cooperate with external service providers.

Romania: Checks on customers
Almost 90% of Romanian companies have their customers’ credit standing checked before deals are concluded. The figure was only higher in Greece (92%). Companies seldom appoint in-house credit management experts or hire external debt collectors.

Russia: Fewer credit checks
Despite a high proportion of new clients, just under half of Russian companies on average check the credit standing of potential clients before transacting business with them. This means that they are at risk of bad debt losses. More than half of all companies in Russia employ credit management experts. On average, less than a fifth make use of outsourcing.

EOS four-nation-survey 2007. Payment practices in Europe
Towards the end of 2007, the EOS Group, in cooperation with the independent market research organization Ipsos, asked a total of 645 companies in four countries about the prevailing payment practices in their respective countries. 200 enterprises in Greece, Poland and Russia respectively, and 45 in Romania, were asked questions on all aspects of their payment experiences, economic trends in their home country and the general topics of information management, arrears management and receivables management. All the EOS survey’s findings can be called up on the Internet at www.eos-solutions.com/surveys.

The EOS Group
With around 3,100 employees in 21 countries, the EOS Group, an Otto Group company, is one of the leading financial services undertakings in Europe. The 37 operating companies in the Group are active in the Information management, Arrears management and Receivables management business units and look after some 20,000 clients around the world – from banks and insurance companies, through manufacturing industry and the mail order segment, right up to public utilities, telecommunications firms and IT companies.