Using the credit crisis as an excuse for late payment is passé. The deterioration in payment behaviour since the credit crisis is reversing itself and is no longer worsening.
But the fact that 70% of customers now pay within the stipulated period appears more positive than it is. This is shown by the ninth Credit Management Trendmeter from OnGuard, an independent periodic survey amongst a representative group of credit managers in the Netherlands.
Reversal in deterioration
A year ago 53% of the credit managers noted an increase in the DSO1. This has now more than halved (24%). At the moment seven out of ten customers pay their invoices within the stipulated period. However, this may be due to the more flexible payment terms offered by the credit managers themselves.
Credit managers view the prospects for payment behaviour more positively. Last year nearly three-quarters expected payment behaviour to deteriorate; now that figure is down to 37%.
The credit crisis is no longer a popular excuse: the most commonly cited reason (61%) for late payment is the decision ‘simply’ to adopt a different payment period. Nearly seven out of 10 credit managers feel that SMEs are too restrained in chasing late payments. 84% would like to see legislation in the Netherlands which penalties excessive payment periods.
A selection of the other findings from the survey amongst credit managers:
- 40% cite the construction sector as the worst payers
- nearly 50% feel that they should take more risks
- 30% reject customers for whom no credit limit has been given
- 74% feel that information from external sources is not up to date
- 85% have contact with all the departments within the organisation
- 54% more often play an advisory role rather than a decision-making role
- 34% decide on customer acceptance and 30% decide on terminating a customer
- 70% are seeing an increase in their workload
- 73% agree that the credit crisis has made their work more interesting
- Credit management at international companies appears to be in the lead
A summary of the survey report (in Dutch only) can be requested from firstname.lastname@example.org. If you would like to take part in the next Credit Management Trendmeter, you can register as a panel member at www.onguard.com/trendmeter or via email@example.com. As a panel member you will receive the full survey report. Please note that the survey is in Dutch only.
About the OnGuard Credit Management Trendmeter
The Credit Management Trendmeter is a survey which is carried out twice a year to identify the trends and developments in the field of credit management. The Credit Management Trendmeter is carried out amongst a representative group of credit managers in the Netherlands by the independent research agency Blauw Research on behalf of OnGuard.
1 DSO = the average number of days that an account is outstanding after the due date