PR90111

SYDNEY, June 16, 2021, /PRNewswire=KYODO JBN/--

Atradius Payment Practices Barometer survey reveals increase in use of credit

led to rise in write offs and overdue invoices

Businesses across Australia are feeling the pinch following a full year of the

Covid-19 pandemic, according to a report by the leading credit insurance firm,

Atradius. The Payment Practices Barometer survey of both large and small

businesses looked at B2B customer payment behaviour over the past year. The

results are dramatic.

5% of all credit sales were written off as uncollectable, more than doubling

the 2% averge recorded prior to the pandemic. The same story applies to late

payments, 54% of business invoices are overdue (compared to 21% in the

pre-pandemic year). In addition to the economic stressors, these significant

increases can partly be explained by a large rise in the number of credit

sales. More than 4 in 10 of the businesses polled (42%) reported accepting

credit requests far more frequently than they did before the pandemic.

On average it took the construction industry one week longer than last year to

settle overdue invoices. Construction businesses reported an overall DSO that

is twice as long as last year (now averaging 49 days). 40% of industry

respondents expect DSO levels to further increase this year. A significant

percentage of businesses across all sectors pointed to liquidity as one of

their greatest concern alongside the health of the global economy. As much as

half of the Agri-Food industry believes the domestic economy will drive

improvements in their sales and profits rather than export trade.

Perhaps unsurprisingly, 3 in 5 of the businesses surveyed reported an increase

in debt management administrative costs. However, many businesses said that the

key to navigating the difficult economic climate was agility. For example, as

many as 67% of respondents in the chemicals industry believe the businesses

that were most successful in adapting to the pandemic challenges, will more

often accept trade credit requests from their customers going forward.

Mark Hoppe, Managing Director for Atradius Oceania, said: "As the customer

credit risk environment becomes more challenging with more businesses selling

on credit, the insolvency environment is likely to increase. A write off rate

of 5% represents significant loss and businesses can put in place measures to

protect themselves against the risk of such losses.

"As businesses look to grow during this time of economic uncertainty, it's

important they continue to employ strategic credit management measures such as

credit insurance to minimise the risk of payment defaults. This will help

protect businesses from the increased risk of customer bankruptcy, help them

manage the additional volume of late payments more efficiently and will also

facilitate company growth by helping businesses explore new opportunities

including extending more credit to existing customers and new customers, and

finding new markets to explore."

About Atradius

Atradius is a global provider of credit insurance, surety and collection

services, with a strategic presence in over 50 countries. The credit insurance,

bond and collection products offered by Atradius protect companies around the

world against the default risks associated with selling goods and services on

credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the

largest insurers in Spain and one of the largest credit insurers in the world.

You can find more information online at [ https://group.atradius.com ]

For further information:

Atradius Australia        

Gabrielle Weiss

Head of Marketing

Phone.: 02 9201 5769

E-mail: gabrielle.weiss@atradius.com

https://atradius.com.au

Connect with Atradius on Social Media

Twitter [https://twitter.com/atradiusAU ]

Linkedin [https://www.linkedin.com/company/atradius-australia ]

YouTube [https://www.youtube.com/user/atradiusgroup ]

SOURCE: Atradius N.V.