Late payment of bills by Europe’s public sector is hurting the construction, healthcare and education industries and slowing job creation, according to credit management services (CMS) group Intrum Justitia.
Among the findings of the ‘Intrum Justitia European Payment Index 2014, Industry White Paper’:
- Europe’s construction industry sees just 51% of invoices settled within 30 days. Similarly, only 59% within the healthcare industry are paid within a month.
- Construction, education and healthcare businesses all report late payment is having a negative impact on their ability to keep or employ people. One out of two businesses in construction and education state late payments contributed to them not hiring.
- Payment durations, bad debt losses and liquidity consequences differ substantially between industry sectors.
Construction businesses suffer most from late and non-payments, with 53% of construction-related credit managers reporting that late payments has a high impact on the company’s business risks, while 64% said that late and non-payments prohibit growth of their company.
“These are businesses largely dependent on public sector customers,” said Lars Wollung, chief executive (CEO) and president of Intrum Justitia.
“The public sector pays generally later than private businesses and consumers. The good thing is that the implementation of the EC Late Payment Directive has the potential to make a big positive difference to unemployment figures. Its implementation is vital to Europe’s future success!”
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