Tough times bring surge in late payments

In the past six months, the percentage of payments delayed by more than 90 days has increased from 9% to 16%, with average late payments now exceeding 110 days, writes Index.hu. According to debt collection agency Directinfo, suppliers are increasingly taking up the role of banks in providing financing for struggling companies. In addition, only 0.5% of business agreements now specify the once ubiquitous payment deadline of eight days, a reflection of the current economic crisis, says Directinfo director Csilla Csatlós. The company reviewed 50,000 invoices and found that the average payment deadline had been extended from 40 days in May to 46 days today. The pressure on suppliers is greatest in the construction industry, where payment deadlines have grown from 54 days to 65 since the summer and a significant number of suppliers are unlikely to make it past the spring. Personal experience and anecdotal evidence also suggests that collecting payments from clients is increasingly problematic.