The payment period of Spanish companies influences credit decisions
The terms in which companies pay their invoices are important for the proper functioning of the market. If excessively long terms are agreed, or the payment period of the companies is longer than established, solvency problems may arise that end with the closure of some companies, so they must be taken into account when making their credit decisions.
And the truth is that the times that Spanish companies agree to pay what is due have not stopped growing since the third quarter of 2020, when they were 77 days, to the 82.34 days that they reached in the first quarter of this year, According to data from the last Informa D&B studio.
This represents a difference of 5 days in a year and a half. To which we must add that not all companies make their invoices effective in the established payment period, only 44% have met the deadlines during the first quarter of the year. Companies must understand this when evaluating their credit decisions.
Interestingly, micro and small companies are more compliant, 50% and 43% in each case pay on time compared to 27% of medium and 13% of large companies. But it is also true that most of the medium and large ones catch up before reaching a delay of 30 days.
In the end, with unpaid invoices after 120 days, there are 4% of micro-enterprises, 2% of small ones, about 1.5% of medium-sized ones and just over 1% of large ones.
Credit decisions: which sectors have the longest payment delays?
The average delay over the agreed term during the first three months amounted to 14.66 days, with which the payment period of Spanish companies reached 96.99 days, again a figure that has been constantly increasing since the third quarter of 2020 .
The average delay in company payments can vary substantially depending on the area of activity in which it is dedicated, and this must be considered when making credit decisions.
Between the sector with the lowest average delay, Industry, with 11.30 days, and the one with the longest delay, Hospitality with 26.51, there is a difference of about 16 days.
Although Hospitality continues to have the worst performance, it should be noted that it is the sector that has reduced its average delay in payments the most in a year, subtracting 7.54 days.
Above the national average are also sectors such as the Administration, with 26.30 days of delay, Other services, 21.37, Energy, 17.77, Financial intermediation, 17.41, Agriculture, 17.19, Construction and real estate activities, 16.61, Transport, 16.59, Business Services, 16.07 and Health, 15.91 days.
The ones that perform the best, together with Industry, are Communications, with an average delay of 14.52 days, Education, 14.43, Commerce, 12.73, and Extractive Industries, 10.73 days.
The only community with a delay in the average payment period of companies of more than 30 days is Melilla
In order to make the relevant credit decisions, it is important to bear in mind that the delay in the payment terms agreed by the companies has been reduced for a year in most of the national territory, especially in the Canary Islands, which has cut 3.90 days, and the Balearic Islands, which remains 3.16 days.
In addition to Melilla, the Canary Islands, Ceuta and Extremadura also exceed 20 days of delay. The difference between the community with the greatest average delay and the one with the least accumulation, Navarra, is 20.83 days.
And if we take into account the proportion of payments on time, it can be seen that only one community exceeds 50%, La Rioja. Aragón is close, with 49.5%, and Navarra and the Basque Country exceed 48%.
Below 40% punctuality are Madrid, Melilla, Murcia and the Canary Islands, where only 33% of companies meet the agreed payment period.
The data of the sector, community or size of the companies are an indicator of a behavioral trend. But it is important get to know the companies in depth with which you work, which will help avoid risks in the credit decisions that are made.
–
