EOS Study "European Payment Practices 2025":
Payment morale in Europe continues to decline.

Around 18 billion invoices are issued across the EU every year, but payment morale in Europe is in a bad state: Approximately one in four invoices is paid late (19 percent) or not at all (5 percent). This is shown by the EOS study "European Payment Practices 2025", for which 2,200 financial managers from 11 countries were surveyed.

Compared to other countries, payment morale is highest in Switzerland and Germany. Here, 21 and 22 percent of payments, respectively, were received late or were uncollectible. In France payment morale is also slightly above the European average: 18 percent of payments were made late, and 5 percent of receivables remained unpaid. In Romania, 29 percent of defaulting payers settle their invoices late or not at all. This makes payment morale the worst in a European comparison.

European companies primarily cite short-term liquidity bottlenecks of their private customers (54 percent) and forgetfulness (51 percent) as reasons for late payment or even payment default. In France, also temporary liquidity shortages rank first with 54 percent, followed by forgetfulness (51 percent), long-term over-indebtedness and personal bankruptcy ranks third (40 percent). 

For business customers, the main reasons cited on average across Europe are payment defaults by their own customers (61 percent) and the exploitation of supplier credits (57 percent). However, slow, non-digitized processing procedures (48 percent) also likely cause delays, according to the respondents. 43 percent see over-indebtedness and insolvencies of their business partners as the cause of unpaid invoices. In France, the picture is similar:  Here, 65 percent of respondents cite payment defaults by their own clients as a reason, 58 percent point to exploitation of supplier credits. In third place, at 48 percent, are procedural errors in invoice processing and insolvencies respectively. In no other European country have corporate insolvencies been cited as frequently as a reason for delayed or non-payment.  

Particularly challenging for companies: Some customers apparently do not pay late by mistake. Around a third of companies assume that both business customers (31 percent) and private customers (34 percent) deliberately do not pay their invoices. In France, 37 percent suspect deliberate non-payment among their private customers and 32 percent among their business customers.

As a result of poor payment morale, European companies grant their customers less time to settle open invoices. At an average of 31 days, the set payment term is at a low in the ten-year trend (business and private customers). In 2015, it was still 34 days, and in 2022, even 37 days.

Private customers in Europe are granted an average of only 23 days to pay. Only Spanish companies are more generous: they allow a comparatively long period of 31 days. In France private customers are expected to pay their liabilities within 24 days.

Business customers in Europe have an average payment term of 36 days, thus 13 days longer than private customers, in France business customers also can expect 36 days.

Payment delays and defaults are not without consequences: Almost every second company stated that it had suffered profit losses in the past because of this (48 percent), and 46 percent stated that this led to higher interest costs. For every fifth company (22 percent), investments were cut or halted. In France the picture is somewhat different: Only 28 percent of respondents report a loss of profits – the lowest figure among all countries surveyed. By contrast, price markups to compensate for payment defaults were mentioned significantly more often, at 36 percent compared to the European average of 29 percent. 45 percent of French companies said they face higher interest expenses und 35 percent encounter liquidity shortfalls. 26 percent of French companies stated that they reduced investments and 21 percent even feared  for their company’s survival – which is, together with Slovenia, the highest figure among all countries surveyed.

Eva Griewel, CFO of the EOS Group: "The longer companies have to wait for their money, the more likely it is that the invoice will not be paid at all. In this respect, payment morale is an important indicator for potential payment defaults. If the number of such defaults increases sharply, it can drive creditor companies themselves into insolvency, with the resulting negative effects such as the loss of numerous jobs."

"Our current study shows that poor payment morale in Europe represents a serious challenge for companies. Although NPL (Non Performing Loans) volumes at banks are currently at a low level overall, we must not underestimate the impact of delayed or outstanding payments. Companies should prepare, because this development places high demands on companies' liquidity management," warns CEO Marwin Ramcke.

The consequences of poor payment morale for creditors can be mitigated with professional receivables management. However, so far only a minority manages their receivables management with external support. Just under a third (30 Prozent) of companies take a dual approach, handling outstanding payments both internally and through external service providers. In France, the figure of 32 percent is slightly above the European average. Only 7 percent of European companies consistently rely on professionals in receivables management, in France the figure stands at 5 percent. 

"For creditors worldwide, receivables management is becoming increasingly complex and riskier, also due to the globally uncertain situation," says Marwin Ramcke. In view of their customers' declining payment morale, companies should therefore carefully weigh the economic risks of payment delays and defaults and consider collaborating with a professional debt collection service provider.