Payment delays for companies in France and Europe in the first half of 1

With respectively 12 and 13 days late on average, French and European companies have seen their payment behavior tighten slightly over a year. On average, in France as in Europe, 1 in 2 companies pays their invoices on time. However, this figure should not mask the increase in the number of late arrivals (more than 30 days). A particularly worrying situation among smaller structures.

For Thierry Millon, director of Altares studies: “During this first half of 2023, in a context of slowdown in activity combined with still high inflation and higher interest rates, the noose tightened on treasuries and thwarted the good intentions observed in 2022. Organizations are returning to their old habits, seeming unable to sustainably deviate from the benchmark of 12 days in France and 13 days in Europe on average. The European Commission's initiative to reduce payment times to 30 days will have to deal with very contrasting inter-company payment habits within Europe. »

In Europe, the 13-day ceiling is ultimately difficult to break

Could the multiple crises that have shaken France and Europe since 2020 be the reason for the improvement in payment behavior observed in recent months? Because since the summer of 2020, after being at their highest with 14,5 days in France and in Europe, payment delays have been gradually reducing. But three years later, Europe came up against the “traditional” threshold of 13 days when France found its own at 12 days.

On the podium of “good students”, Belgium in difficulty, Germany and the Netherlands unshakeable

Belgium recorded a 4th consecutive quarter of growth and now has 11,4 days of late payments on average. The percentage of companies paying their invoices on time falls significantly below 50% (46,7%). The share of major laggards is at its highest (6,4%) for two years. Accustomed to the podium of “best payers”, the country could leave its place to its French neighbor.

The Netherlands and Germany, the two historic leaders, do not waver and remain below the 7-day threshold, at 4,1 days and 6,2 days respectively. This “payer culture” leads to more than three quarters (76,7%) of Dutch companies and almost two thirds (62,4%) of German companies paying their suppliers without delay. Please note, however, that the situation is deteriorating slightly in Germany.

Latin countries lagging behind, the United Kingdom is getting back on track

Payment delays are being reduced very gradually in Portugal: above 30 days in 2019, they rise to 24 days in the 2nd quarter of 2023. Only one company in five (20,1%) pays its suppliers on time and more 15% of companies have delays of more than 30 days.

Its Spanish neighbor, which fell below the 15-day threshold in 2022, returned just above it during the first half of 2023. Since the end of 2021, around 44% of companies have respected the invoice due date. On the other hand, almost one in ten companies (9,6%) now have delays of more than 30 days, or around 1% more than in 2022.

Italy drops below 17 days of delay in 2023, reducing its delays by more than two days in three years. Over the past year, around four out of ten companies have paid on time, but almost 12% are still postponing supplier payments for more than 30 days.

British payment delays had been stuck above the 14-day threshold since the health crisis. For the first time, they fell slightly below (13,8 days) this second trimester. If the proportion of long delays, greater than 9% since Covid, is stabilizing, the percentage of good payers has increased significantly over the past year. The United Kingdom now joins France and Europe with almost one in two companies (49,4%) honoring their invoices without any delay.

For Thierry Millon: “European companies are trying to resist headwinds. If payment delays do not soar, a divide is widening between more companies keeping their contractual commitments and more companies also delaying their payments by more than a month. If the good behavior of the former confirms that they have sufficient cash, the latter, on the other hand, demonstrate increasingly strong tensions and an insufficient level of liquidity. »

In France, the number of good payers is at its highest, but serious delays are also more numerous

In France, the average delay rises slightly to the disadvantage of delays of more than 30 days being more frequent (7,6% compared to 5,7% a year ago). The proportion of good payers is at its highest ever, close to 50% (49,3%), a ratio comparable to that of Europe (49,9%).

The situation is becoming very tense among SMEs but also VSEs

In 2022, French SMEs returned to their pre-Covid crisis behavior, falling within 12 days.

During the first half of 1, companies with 2023 to 10 employees remain under 49 days. But companies with 11,5 to 50 employees are seeing their delays increase by more than one day over a year (200 days in Q12,4 2 vs. 2023 in Q11,2 2).

Diametrically opposite observation among VSEs. The largest structures - more than 3 employees - remain at around 11,5 days while the smallest, with less than 3 employees, increase to 12,2 days in the 2nd quarter of 2023.

Mid-sized companies and large companies with more than 1000 employees do not confirm in 2023 the improvement initiated the previous year. Reduced to 16,5 days during the summer of 2022, average delays are now around 18 days (17,7 in the 2nd quarter).

For Thierry Millon: “The first analyzes of the summer confirm the uncertainty of the first half of the year. SMEs continue to struggle. But it is within the scope of very small businesses that the tensions would be greatest. VSEs with fewer than three employees could approach 13 days behind schedule in the third quarter of 2023, a very unusual level for a population generally forced to pay more quickly. »

B2C activities under pressure, those of B2B in turn weakened, and the administration is slipping

B2C activities weakened since the Covid crisis are still struggling to recover

In catering, delays exceeded 24 days during the health crisis. After a gradual improvement in 2022, the situation deteriorates again in 2023. The sector ends mid-year at 19,4 days and should quickly exceed 20 days.

The trend is also tense for drinking establishments. Delays increased by 4 days in the first half of the year compared to 2022 (18,2 days in the first half of 1 vs. 2023 days in 14,2).

After very quickly reducing their delays after the health crisis (16 days at the end of 2021 vs. 26 in the first half of 1), hairdressers are seeing their payment behavior quickly deteriorate again. The sector ends the semester close to 2020 days.

The retail trade is holding up better but tensions remain, particularly in food and clothing. The food sector ends this first half at around 13,5 days, erasing the efforts of 2021 and 2022.

In clothing, payment behavior is very irregular and still fails to return to its pre-Covid values ​​of around 15 days (17 days in the first half of 1).

In B2B, construction remains the exemplary sector, real estate is slipping

The clothing and textile wholesale trade has been hitting the threshold of 19 days of delay for a year, a level comparable to that observed in the second half of 2020. The sector was less than 15 days in the first half of 2019.

In information-communication, delays have been increasing very quickly over the past year in publishing and remain high in film & sound activities.

Tensions are increasing in business services, in particular for labor placement or temporary work agencies which had managed to fall below 14 days on average in 2022, but rise above 16 days during of the second quarter of 2023. The trend is also very noticeable in the security sector with delays increasing by more than 4 days in one year (14,6 days in the first half of 1).

Payment delays stabilize within 16 days in road freight transport.

Industry and construction show stable payment behavior with delays respectively under 11 days on average for the first and close to 10 days for the second. However, the trend is towards tightening in construction this summer.

Real estate, on the other hand, is slipping sharply. Real estate development now exceeds 26 days of late payment on average. For their part, real estate agencies, at 17,3 days, are 3 additional days late over a year.

Another business segment requires attention. This is the administration where payment behavior has deteriorated significantly since 2022. Under 12 days in 2021, the average delay approached 13 days at the end of 2022 and now exceeds 14 days.

In the region, Brittany is in the lead, Ile-de-France dead last

The payment delay for Ile-de-France businesses exceeds 17 days, well above the national average.

Overseas, delays soared beyond 30 days in spring 2021. At the end of this semester, companies are returning to more usual payment behaviors, which however remain high at 20 days.

Conversely, three regions manage to stay below the 10-day delay threshold. These are Brittany (8,9 days), Pays de la Loire (9 days) and New Aquitaine (9,9 days). These regions had already managed to maintain delays of around 11 days during the summer of 2020 while the national average exceeded 14 days.

For Thierry Millon: “The 2022 report from the Payment Deadlines Observatory [1] highlighted encouraging developments despite supply tensions and the return of inflation. Nearly one in two French companies now pay their invoices on time. They were four in ten before Covid and barely one in three during the health crisis. This first half of 2023 can undoubtedly in turn provide encouragement given the progress made overall in Europe, and in France in particular. The question of responsible purchasing, and therefore of respecting payment deadlines, is a major issue at the heart of the CSR approach of companies. This is why the positive trajectory undertaken must be able to involve more and more players, particularly SMEs. However, liquidity is sometimes lacking and the increase in major delays observed in several countries including France, reminds us of very operational realities. You need customers who pay on time to be able to pay your suppliers on time. Inter-company credit and its 800 billion euros is not a zero-sum game where supplier and customer positions are always balanced. »

[1] https://publications.banque-france.fr/liste-chronologique/rapport-de-lobservatoire-des-delais-de-paiement