The protection of business profitability is a core concern of 30.3% of surveyed businesses in Asia Pacific, according to Atradius’ APAC Payment Practices Barometer 2017. Thus, surveyed participants plan to reinforce their credit management processes to mitigate any impact felt from Brexit, the China growth slowdown and the US protectionism.
Checks on buyers’ creditworthiness and monitoring credit risk are the most preferred credit management tools.
The report also reveals that sales on credit terms continues to account for high proportion of B2B sales in APAC (45.9%), in comparison to Europe (40.0%) and Americas (45.5%). There was also a slight increase in overdue invoices from 44.3% in 2016 to 45.4%.
As for payments, the average payment duration decreased to 55 days, highlighting the shortening of payment terms and fewer delays. Average payment terms granted are 30 days. Insufficient availability of funds and complexity of payment procedures are key delay factors. Late payments are most common from consumer durables and construction industry.
Meanwhile, Asia Pacific’s uncollectible receivable is the same level as registered in 2016 (2.1%), higher than that of Europe (1.2%) and Americas (2.1%).