Delays in invoice payment show extent of cash shortage in market

Over 35 percent of invoices issued in domestic transactions among enterprises have gone unpaid despite the fact that Greece has the second longest credit period among 14 European countries at an average of 57.8 days, according to the latest Transaction Behavior Barometer by credit insurance company Atradius.

Data show that about one-sixth (16.1 percent) of the value of domestic requirements remain unpaid even 90 days after the deadline, highlighting once more the serious cash flow problem that local enterprises face.

The survey found that 35.1 percent of invoices between Greek companies and 8.7 percent of the invoices issued by Greek companies to foreign clients were not paid by their deadline. The domestic rate is only second to Italy’s 36.8 percent and considerably higher than the European average (including Turkey) of 30.1 percent.

No more than just 54.8 percent of invoices’ worth is paid on time in Greece according to the latest data by Atradius for this year, which is the lowest among the 14 countries surveyed – the average rate stands at 67.3 percent. The average length of time for payment, meanwhile, amounts to 63.2 days, against a European average of 56.6 days.

The survey further found that in an effort to offset losses from reduced demand and the major delay in payments, Greek enterprises appear ready to supply commercial credit to foreign customers in a bid to strengthen their exports. Therefore, while according to the barometer for 2012 the share of Greek companies supplying credit to customers abroad amounted to 27.4 percent, in this year’s survey this rate has grown by 21.5 percent, reaching 33.3 percent of all companies.

The challenge to secure liquidity is the biggest companies face according to 48 percent of respondents, against a European average of 27.8 percent. The second biggest challenge for local firms is the collection of debts from customers according to 20.4 percent of those surveyed.

This has also entailed a shift in corporate policies, as sales on credit have declined from 66.1 percent last year to 60.2 percent this year, while the average period of credit has shrunk from 74.6 days in 2012 to 57.8 days in 2013, the Atradius survey has found.