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Business representatives raise concerns of illegally late invoice payments



The Spanish Confederation of Small and Medium Enterprises (CEPYME) published its late payment observatory, where it warns that almost half of the invoices paid in Spain, the majority to self-employed workers and small businesses, are paid outside the legal deadline established, which is a maximum of 60 days.

According to the data from the Delinquency Observatory for the last quarter of 2023, prepared by CEPYME, with data from CESCE and Informa D&B, 50.3% of invoices were paid on time in Spain in the quarter, which means that practically half of the invoices were paid late.

In fact, according to data from the confederation, late payments already represent a financial cost of 2.6 billion euro for small businesses, 50% more than in the same period of the previous year. A situation that is not easy to face for small businesses, which have fewer financial resources and negotiating capacity and which must also assume the increase in other costs – energy, supplies, labour, etc. – and the effects of inflation, which reduce their profitability and their negotiating capacity to access the necessary financing.

The average payment period for invoices is still 20 days longer than the legal period

One of the most worrying aspects of the evolution of late payment is the stagnation of the Average Payment Period (PMP) at around 80 days, twenty days above the maximum period established by law. In the fourth quarter of 2023, the average payment period (PMP) stood at 80.2 days, with a minimal decrease (0.2 days) compared to the previous quarter.

Specifically, the average period in 2023 was 81.8 days, the lowest since 2017, but higher than in 2015 (81 days) and still well above the maximum legal period of 60 days established by Law 15/2010.

For CEPYME, several factors influence this evolution of the average payment period. On the one hand, inflation, which despite falling, continues above normal. On the other hand, the higher interest rates, which drive companies to try to shorten the collection periods of their invoices to mitigate the negative impact on their accounts of the loss of purchasing power of the euro and the higher financial costs. At the same time, the slowdown in the economy and high interest rates encourage counterproductive no-cost financing resulting from postponement of payments.

The greatest increase in the average payment period is in large companies

By business size, the average period was reduced only in microenterprises in year-on-year terms, with a drop of 0.8 days, to 75.4. Small and medium-sized businesses maintained their respective PMP at the same levels as in the fourth quarter of 2022 (79.6 and 83.3 days, respectively), while large companies showed, for the fifth consecutive quarter, the largest increase in PMP, with an increase of 11 days, reaching 88.7 days.

However, despite the reduction in the national PMP, it increased year-on-year in eight autonomies. The maximum difference between the PMP of the different autonomous communities reaches 24.7 days, comparing the highest PMP recorded in Murcia (93.2 days) with the lowest, in the Balearic Islands (68.5 days).

In SMEs as a whole, invoices paid on time reached 50.3% of the total (+1.1 percentage points), which is the highest proportion since March 2020. In addition, it is observed that the percentage of invoices satisfied in the agreed period is greater the smaller the size of the company.

In microbusinesses, 51.2% of invoices were paid on time, the highest proportion in the last three and a half years. At the same time, invoices paid with a delay of more than 30 days were 12.3% of the total (1 percentage point more than a year ago), remaining above 12% for the fourth consecutive quarter.

In small businesses, the proportion of punctual payments reached 47.8% (+4.1 percentage points year-on-year), which is the highest proportion since June 2018. This offsets the year-on-year increase of 4 tenths in the proportion of invoices paid with a maturity greater than 30 days (6.9%).

In medium-sized companies, during the fourth quarter of 2023, 30.2% of invoices were paid on time (+2 percentage points year-on-year). This is the highest percentage since March 2018. At the same time, invoices paid more than 30 days late remained at 6.4% of the total, the same proportion as a year before.


The post Business representatives raise concerns illegally late invoice payments appeared first on Spain Today – Breaking Spanish News, Sport, and Information.



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