Speed of B2B Payments in the Americas Declines
Tuesday, July 17, 2018
The latest results of annual B2B payment practices survey conducted by global credit insurer Atradius show an increasing level of deterioration in payment practices in the Americas.
- Average payment duration increased from 61 days in 2017 to 63 days in 2018.
- On average, 90.3 percent of respondents frequently experience late payments
(the average is highest in Mexico (94.4 percent) and the U.S. (90.9 percent).
- On average 50 percent of invoices are unpaid by the due date.
“It is interesting that in a healthy, growing economy, bad debt continues to plague the B2B markets,” said David Huey, Atradius president and regional director of U.S., Canada and Mexico. “To think that 51 percent of respondents have had a customer suffer bankruptcy or simply close their doors is eye opening.”
The average proportion of uncollectable B2B receivables in the Americas declined, though slightly, from 2.1 percent in 2017 to 1.8 percrent this year. At 2.5 percent, Brazil is the country with the highest percentage of uncollectable receivables in 2018, mainly because customers filed bankrupty as reported by 54.7 percent of respondents in Brazil.
The level of intra-regional exports seems to be stable, particularly among the NAFTA countries. This, despite the threat of a protectionist turn by the U.S. and pending the revision of the free trade agreement. Nearly half of the suppliers interviewed in NAFTA countries say that more than 50 percent of their commercial activities occur within the region, with 16.5 percent trading exclusively within the current free trade area.
Trade with the U.S. either increased or remained stable for 81.5 percent of the suppliers interviewed in Mexico. In Canada the positive trade picture is even more pronounced with total of 90.3 percent maintaining the same or better trade levels with the US.