Payment Practices Barometer Eastern Europe 2017

After an increase of almost five percentage points in 2016, the percentage of overdue B2B invoices in Eastern Europe decreased again this year (41.5%).

With the exception of Turkey, economic prospects across Eastern Europe are improving as domestic consumption picks up with help from tight labour markets, loose monetary policy and fiscal stimulus. Despite the positive outlook, more Eastern European respondents expect an overall deterioration than an improvement in the payment behaviour of their B2B customers over the coming 12 months.
Sales on credit terms

Despite a very modest increase in sales on credit terms this year (40.3%, up from 39.8% in 2016), respondents in Eastern Europe still seem to prefer selling on terms other than credit (59.7%).
B2B sales on credit in Eastern Europe

Similarly to what was observed in previous surveys, the average percentage of sales made on credit to domestic B2B customers (42.7%) is higher than the percentage of sales made on credit to foreign B2B customers (37.9%).
With the exception of Hungary, Czech Republic and Slovakia, all Eastern European countries surveyed seem to be more averse to offering credit terms to foreign B2B customers than to domestic B2B customers.
In 2017, respondents in Hungary (65.5%), Czech Republic (43.0%) and Turkey (38.1%) were the most open to selling on credit. In contrast, respondents in Poland (28.9%) had the lowest average percentage of sales made on credit terms.
Eastern European respondents (40.3%) seem slightly more inclined to sell on credit than their peers in Western Europe, where 38.8% of the total value of B2B sales was transacted on credit.

Overdue B2B invoices (%)

After an increase of almost five percentage points in 2016 (42.9%), the percentage of overdue B2B invoices in Eastern Europe decreased again this year (41.5%).
Past due B2B receivables in Eastern Europe

88.5% of respondents in Eastern Europe (2016: 88.6%) reported late payments from their domestic B2B customers. Just under half of the domestic invoices, an average of 45.2%, remained unpaid at the due date.
The frequency of late payments from foreign B2B customers decreased from 81.8% in 2016 to 78.9% this year. On average, 37.7% of foreign invoices remained unpaid at the due date.
In Eastern Europe, respondents in the Czech Republic were the most likely to experience late payments (domestic 95.1%, foreign 84.8%) and respondents in Hungary the least likely (domestic 75.2%, foreign 57.8%).
Despite minor improvements registered in 2017, Turkey seems to be the country most impacted by late payments of invoices; 60.9% of the total value of domestic and 50.9% of foreign invoices were paid late. This is also reflected in the country’s DSO figure, which averaged 73 days and is significantly higher than the average for Eastern Europe (61 days).
The percentage of overdue B2B invoices is higher in Eastern Europe (42.9%) than in Western Europe (41%).