Monday, May 12, 2014
Europe’s Companies Write Off €360 Billion In Late Paid And Unpaid Debt
Interesting statistics by a credit management group concerning debt write offs in Europe. In the United States, unpaid bills can lead to lawsuits and bankruptcies. What typically happens in Europe? Does the business owner write the bad debt off, sue on it, or do something else?
Mon., May 12, 2014
The debt written off by Europe’s companies due to late payment or non-payment of bills has swelled to €360bn despite the pick-up in economic activity in the region, theFinancial Times reported. “The late payment consequences for businesses pose a real threat to Europe’s competitiveness and social wellbeing,” said Lars Wollung, president of Intrum Justitia, a credit management group. “Hardest hit by the problem . . . are small and medium enterprises.” Justitia surveyed more than 10,000 business managers in 33 European countries, including Russia, for the annual European Payment Index. Bad debts – bills or invoices which companies have written off due to late or non-payment – grew from 3 per cent of annual revenues in 2013, or €350bn, to 3.1 per cent this year, or €360bn. Nearly three-quarters of the companies taking part in the research said that there had been no improvement in the late payments problem in the past three months despite the economic pick-up, and 46 per cent believed late and non-payment risks were actually increasing.