When you conduct business abroad, it is good to delve into the payment behavior of your debtor to find out how good they are at paying. In almost every European country, a legal payment period of 30 days applies to companies. However, the payment behavior is not the same in every country. For example, there are countries where payments are usually made quickly, but there are also countries that will happily wait a few months before paying an invoice. In addition, there are other aspects that influence the payment behavior of European companies.
Many companies from Southern European countries do not adhere to the payment term. For example, 60% of French companies pay their invoices too late. Spain also has a lax attitude when it comes to paying invoices. They pay 70 days later, just like many companies from Italy. In fact, it is not uncommon in Italy that payment is only made after 100 days. We also have experienced this with some Greek companies. It is therefore important to have a strict debtor policy when you conduct business with a company from Southern Europe. This way you avoid having to wait for your money or even worse: transfer your debt collection claim now.
Although the payment behavior of some Eastern European companies has not always been good, this has improved considerably in recent years. Stable economic growth in Eastern Europe has had a positive effect on payment behavior. This is particularly reflected in Polish companies.
The payment behavior of companies in Western Europe has been fairly good for years. Countries such as Germany and the Netherlands are among the better payers in Europe. In comparison with other countries, invoices are paid reasonably on time. But despite the positive payment behavior, it is important to use a good, strict debtor policy. Every year we handle many debt collection cases involving companies from these countries.
In countries where there is economic instability, we often see that the payment behavior of companies lags behind. For example, we saw a sharp increase in the number of debt collection cases involving Greek companies during the financial crisis in Greece. This was also the case with the Turkish crisis after the unsuccessful coup in 2016. During this time, our Turkish lawyer received a lot more debt collection cases involving companies from Turkey. Therefore, always check the economic situation of your business partner’s country before you start conducting business. Although it does not always say something directly about your business partner themselves, it is important to keep abreast of the economic developments in the country in which you do business. Be alert for signals that your customer may not be able to pay (anymore).
Would you like more information about collection in Europe or do you have a question about a collection case? Then contact us today. Our international collection specialists and attorneys will be happy to advise you.