Amsterdam, 19 March 2019 – Dutch small and medium-sized enterprises (SMEs) are struggling with poor payment discipline from their customers. More than half of all invoices issued in 2018 were not paid within the agreed term. This is evident from an analysis by Payt, provider of accounts receivable management software, based on more than 1.8 million invoices. Late payments are one of the main causes of bankruptcy.
High payment discipline in healthcare
Companies in business services, consultancy and research are particularly affected by late payers. In these sectors, as many as five per cent of invoices remained unpaid after three months. By contrast, healthcare showed strong payment discipline. In 2018, the average period an invoice remained outstanding was only 20 days, significantly faster than in other sectors.
“For quick payments, a shorter payment term is not a cure-all,” says Sander Kamstra, director of Payt. “This applies across all sectors. Many debtors wait until the second or third reminder. Almost five per cent only pay after the final reminder, and more than one per cent of invoices end up in a collection process.”
14-day terms make little difference
Interestingly, invoices with a 14-day payment term were paid just one week faster than those with a 30-day term. On average, invoices with a 14-day term remained outstanding for just over 25 days, while 30-day invoices were settled after just over 32 days.
Kamstra notes: “Debtors often follow their own internal payment schedules, rather than the dates stated on the invoice.” Another notable finding: companies that included an iDEAL payment link with a 14-day invoice were paid after an average of 16 days – nine days earlier than without such a link.
Noord-Brabant: longest wait for payments
For companies seeking healthy cash flow, Zeeland is the most favourable region: invoices there remained outstanding for an average of 26 days. In Noord-Brabant, however, organisations had to wait the longest, at 31 days. Friesland also showed long delays, averaging 30 days, while Utrecht sat exactly in the middle with 28 days.
“Whether invoices are left unpaid for a long period also depends on the collection efforts of the company,” Kamstra explains. “The more consistently you follow up, the sooner invoices are settled. There is still progress to be made across the Netherlands in this respect.”
