REPORT: 65% anticipate high risk of unpaid or delayed debts next year

Romania is facing high inflation and 56% of companies are worried about their capacity to satisfy their employees' demands for high salaries, according to the European Payment Report 2022, published by Intrum. 63% of respondents declare their organization does not have internal expertise to manage the impact of a new crisis over their business.   “Romania is facing high inflation, and 56% of companies are worried about their capacity to satisfy their employees' demands for high salaries. 63% of respondents declare their organization does not have internal expertise to manage the impact of a new crisis over their business. 74% of companies would invest in improving sustainability performance, while 66% would make payments to suppliers more rapidly,” the report shows.   360 companies participates in the study in Romania.   “Although in the last 12 months companies met challenges such as Covid effects , inflation, threat of interrupted supply chains and increase of interest rates, they are optimistic and support business development. More and more Romanian companies (51%) are preoccupied by business consolidation through strengthening sustainability. Companies also have in view, as main actions against delayed payments, improving the process of debt management (52%) and concentration on early debts (67%)” said Catalin Neagu, managing director Intrum Romania.   Certainly, inflation is a new preoccupation for Romanian companies as well as for East European ones, he added. Companies expect inflation and the other political-economic threats to affect cash flow in the following year.   58% of respondents say they foresee higher interest rates, so they are more cautious about loans and expenses.   Considering that all labor sectors and domains have been affected, foreign influences are mainly reflected in the customers' payment behavior, as they needed an average payment time between 42 and 67 days. “The customers' capacity to pay in time continued to be the main preoccupation for companies. In Romania, 65% anticipate a high risk of non payment or delayed payment in the next 12 months. On one hand, 82% of companies had to accept higher payment terms than the usual ones. These payment terms offered to customers, although they risk affecting businesses, back the relation between business and reducing the possibility of bankruptcy,' the report shows.   On the other hand, 56% of companies consider that macroeconomic uncertainty has determined them to extend payment terms for suppliers, but they are trying at the same time with developing business to update processes needed to amend that aspect.   Therefore, aware if the impact delayed payments have on their businesses, and the fact that they do not have the necessary internal expertise to manage new crisis situations, companies adopted many precaution measures to improve performance.   The report was made with the aid of answers obtained from representatives of 11,007 European companies. The study was made at the same time in 29 European countries over January 17- April 13, 2022. 360 respondents from Romania participated in the study.   The sample includes experts from the financial area and level C executives. Data were analyzed at pan-European and local levels, and according to the dimensions of companies.