Nearly half of British businesses expect their customers’ B2B payment behavior to deteriorate over the next 12 months, in the context of serious liquidity problems, according to the 2024 Payment Practices Barometer prepared by Crédito y Caución.
64% of UK businesses expect an increased risk of bankruptcy. One reason for this upward trend is the pandemic-related budget stimulus and loans that have increased business costs.
The use of trade credit in B2B strategies plays a very important role in the UK. Nearly two-thirds of sales are made on credit, highlighting its importance in maintaining competitive advantage. 53% of companies across all sectors use trade credit as their main source of financing to resolve treasury issues and the impact of credit risk on their client portfolio. In this context, late payments affect 40% of credit sales and non-payment cases account for another 7%, mainly due to customer liquidity problems.
The risk management strategy is particularly important for the construction sector in the face of declining residential demand. Half of companies across all sectors saw no significant change in their average collection period, although 13% saw debt collection efficiency deteriorate, especially in the construction sector.
The development of the national economy is a primary concern for British businesses, in a constrained monetary context that limits access to finance and makes investment difficult. In an economy where the services sector plays an essential role, there are growing concerns about rising costs that would lead to higher inflation. Geopolitical uncertainties are another cause for concern for UK businesses in the short term, as they could further destabilize costs and disrupt delivery times, exacerbating inflationary pressures. In the long term, the main challenge identified by companies across all sectors is the impact of stricter environmental regulations and their ramifications on the operation of companies.
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