Press release: Proportion of invoices with longer due dates is growing
The credit policy study for 2012 just prepared by Krediidiinfo shows that the share of invoices with terms of payment between 15 and 30 days has increased the most – they form one third of all issued invoices. Such an increase took place at the expense of invoices with shorter terms of payment (8-14 days).
Thus the average term of payment in Estonia also increased and reached 14.2 days. Most companies inform customers about expiration of payment terms by email (81.1%) and by phone (76.3%).
Currently the all-time high share of businesses (89%) is generally content with payment discipline of their customers. 61% of companies pay their invoices in time, 33% delay payment by up to 30 days, while only 6% delay payment for longer than 30 days. Average payment delay in Estonia is currently 10.1 days.
The study shows that 70% of companies assess business solvency of their customers.
The less customers a company has, the more centralized is its decision-making: in that case most questions related to credit policy are decided by the company’s manager (74.3%). The more customers a company has, more often written credit policy regulations are used (16%). Note that the first figure has increased during the year, while the second one has decreased by almost three percent.
The important factors that influence the credit policy decision-making are payables to suppliers (94%), invoices unpaid by customers (73%), as well as short-term and long-term liabilities (72%). Turnover, profit and equity figures are considered somewhat less important.
When deciding on crediting new customers, ca. 73% of businesses always control their solvency with the Tax and Customs Board, while 64% also control the right of signature. 62% of respondents always study information on the company owners and its board. 50% also pay attention to the company’s debts to other businesses (in the Payment Discipline Registry).
Information on existing customers is controlled twice less frequently than on new customers, although it is a well-established fact that most credit losses are related precisely to regular customers. Before making credit policy decisions 31% respondents always control tax debts of regular customers (30% in 2011), while 27% also pay attention to breaches of payment discipline (24% in 2011).