Australian businesses are battling high levels of unpaid debt

Atradius Payment Practices Barometer Highlights the Importance of Strategic Credit Management in the Australian Market

SYDNEY, May 17, 2022 /PRNewswire/ — According to the latest edition of the Atradius barometer of payment practices for AustraliaHigh levels of unpaid debt are prompting tighter credit controls among Australian businesses as they fight for survival in a competitive market.

Several major concerns for the future emerge from the results of the Atradius Payment Practices Barometer Survey for Australia in a period of intense economic flows. These include the prospect of higher global oil prices and inflation, as well as uncertainty about the ongoing pandemic. Fears about geopolitical conflicts and how supply chain disruption could affect global trade are also present. The companies surveyed Australia are very concerned about a negative impact on profits in the coming year.

Despite this, most companies maintain a positive outlook and expect some improvement in B2B payment practices over the next twelve months. Trusting customers to make payments can encourage sales expansion and also build loyalty. However, this could lengthen the DSO and have a negative effect on liquidity levels.

Another factor is that insolvencies are expected to increase in frequency in the second half of the year and perhaps reach levels last seen in 2019. There have already been a few large insolvencies in the first quarter, and that should have some flow. on effect.

“The figures in the report show signs of increasing stress,” said Marc Hoppe, CEO Oceania. “They show that unpaid commercial debt is still high, with 42% of invoices overdue and 6% written off as uncollectible. Risks of default are increasing as the global economy heads into a possible recession. We expect that bad debts and insolvencies continue to increase, at least pre-Covid levels. Suppliers must be prepared to manage this financial stress. It will be important to have more market information than their own commercial experience .”

The Atradius PPB survey for Australia also found that 46% of companies said they had increased their trade on credit with B2B customers. Two important reasons were to protect current sales from competition and to give B2B customers more time to pay. Again, this only underscores the critical importance of strategic credit management. The 2022 Atradius Payment Practices Barometer for Australia was conducted in the first quarter of 2022. The report can be downloaded from the Atradius website at https://group.atradius.com (Publications section) or at https://atradius.com. at (Publications section).

About Atradius: Atradius is a global provider of credit insurance, surety and collection services, with a strategic presence in more than 50 countries. The credit insurance, surety and collection products offered by Atradius protect businesses around the world against the risks of default associated with the sale of goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in the Spain and one of the largest credit insurers in the world. You can find more information online at https://group.atradius.com

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