Asia Pacific: Businesses' Concern About Cash Flow Up From Last Year

PR58779

AMSTERDAM, Nov. 27 /PRN=KYODO JBN/ --

    The latest edition of the Atradius Payment Practices Barometer [

http://global.atradius.com/paymentpractice/list/paymentpractices.html?utm_campaign=ppb-2014%2Bppb-apac&utm_medium=pr-2014-11-26&utm_source=pressrelease&utm_content=ppb-2014%2Bppb-apac

] for Asia Pacific reveals that more businesses in the region than last year

feel pressured by the stresses of maintaining sufficient cash flow. This

reflects growing concern about a deterioration of the credit quality in several

countries in the region.  

    The Atradius Payment Practices Barometer survey respondents in Asia Pacific

reported that, on average, 36.2% of the total value of their B2B receivables

remained unpaid when due (average for the Americas and for Europe: 38.4% and

36.4% respectively). While the primary reason for payment delays from domestic

customers is insufficient funds (cited by 47.3% of survey respondents), foreign

invoices are more likely to go unpaid due to complexity of payment procedures.

Complexity of payment procedures for foreign customers was experienced most by

Chinese respondents (55.9%). Around 30% of respondents in the region stated

that domestic and foreign buyers often delay payment as a source of surrogate

financing.

    With 4.4% of the B2B receivables remaining unpaid after 90 days overdue,

and half of this value written off as uncollectable, respondents in Asia

Pacific lose, on average, 50% of the total value of their receivables that are

not paid within 90 days of the due date (average for Europe and the Americas:

35.0% and 51.9% respectively).

    Against this backdrop, it comes as no surprise that there is growing

concern about cash flow levels across several countries in the region. Overall,

more than one in three respondents in the region consider this their biggest

challenge to profitability this year. By country, this is felt particularly

keenly in Taiwan (43.5% of respondents). Across the region, nearly 72% of

respondents reported they become concerned about the sustainability of their

businesses when DSO exceeds the average payment term by 31 days. 70% of survey

respondents use at least one credit management practice to protect their cash

flow and improve the financial stability of their business. India, at 85.4%,

was most likely to use some form of credit management - possibly reflecting the

changeable economic conditions, in particular, slowing economic growth.

    This is a clear reflection of changeable economic conditions in a region

whose overall growth forecasts seem to be impacted by various factors, such as

China's economic growth slowdown, weaker domestic demand in a few of the

emerging Asia economies due to tightening credit conditions, and sluggish

global demand affecting the Asia Pacific countries with tight trade links to

advanced economies.

    Eric den Boogert, Director of Atradius Asia commented "In Asia, China's

economic policy largely impacts the entire region. Due to decreased imports and

investments, regional growth expectations have been revised downwards. Growth

expectations for India and Indonesia are uncertain. In several countries in the

region, there have been concerns about increasing debt and deteriorating credit

quality. This is very likely to cause a worsening of the payment behaviour in

several countries in the region".

    The complete report highlighting the findings of the 2014 edition of the

Atradius Payment Practices Barometer for Asia Pacific [

http://global.atradius.com/paymentpractice/list/paymentpractices.html?utm_campaign=ppb-2014%2Bppb-apac&utm_medium=pr-2014-11-26&utm_source=pressrelease&utm_content=ppb-2014%2Bppb-apac

] can be found in the Publications [

http://global.atradius.com/publications/list/publications.html ] section of the

Atradius.com [ http://global.atradius.com/ ] website.

    About Atradius  

    The Atradius Group provides trade credit insurance, surety and collections

services worldwide and has a presence through more than 160 offices in 50

countries. Atradius has access to credit information on 100 million companies

worldwide. Its products help protect companies throughout the world from

payment risks associated with selling products and services on credit.

    http://www.atradius.com

    SOURCE: Atradius N.V.