How much time is too much time?

Businesses are spending an average of 74 days a year chasing late payments, distracting them from their core focus and limiting growth. What could they be doing to strengthen their collections efforts and ensure they get paid?

The cost of late payment isn’t limited to the size of the invoices themselves. The time and resources sucked from a business in chasing payment can be enormous. 

In the latest annual European Payment Report, Intrum calculated that businesses are spending an average 74 days a year chasing debt. This adds up to an incredible €275bn cost to the economy. 

How many days European countries spend each year chasing late payments from customers

European Payment Report 2023, Q19


United Kingdom

European average



Payment negotiations increasing

More than half of the 10,000 European firms surveyed by Intrum (53 per cent) say they are finding it increasingly difficult to reach agreement with customers on terms that are mutually beneficial, leading to protracted negotiations. The same proportion complain that customers are asking them to postpone issuing invoices, while 48 per cent say they are increasingly being asked to make retrospective changes to contracts to postpone payment or obtain a price discount. 

On average, companies say chasing clients for payment is taking up 10.4 hours every week, or 74 days a year. Using the average salary per country provided by the OECD, this translates into a total annual cost to the European economy of EUR €275bn. This is even more than the GDP of Finland and Portugal, according to the most recent data from the World Bank. 

Costs like these are unsustainable. They are placing unnecessary stress on businesses and are preventing investment in initiatives that could create a stronger, more sustainable economy. 

Two thirds of businesses (65 per cent) say that if clients and customers paid them more quickly, they would be able to pay their own suppliers with greater speed. At the same time, 61% say getting paid more quickly could help them to prioritise sustainability performance, and 46% say it might allow them to expand their workforces.  

A minority of businesses (seven per cent) are doing nothing when their clients fail to pay them.

Doing nothing means your invoice is a very low priority. It is always worth following some basic internal processes or outsourcing collections capability.

So what can businesses do to get paid?

  • Focus on early arrears: This is a crucial element of successful collections and one 72 per cent of businesses who say they are taking steps to reduce credit risk and improve payment are doing. Leaving matters to deteriorate only makes it harder to secure payment. Instead, businesses should be making early contact with customers to establish their circumstances, remind them of their obligation to pay and working with them to arrange an alternative solution if they can’t.
  • Work with external debt collection agencies: Reputable external debt collection agencies have the tools, technology and expertise to assist businesses at all stages of the credit lifecycle. However, while 55 per cent of businesses say they will take legal action if a client fails to pay, only 18 per cent are working with debt collection specialists earlier in the process.
  • Invest in new technology: A fifth (21 per cent) of businesses are digitalising and investing in new technology to reduce credit risk and improve late payment. However, 44% say they recognise the need to invest in technology but don’t want to do so at this time. 
    Overcoming that reluctance will pay off, says Szallas Group’s Józef S. “During Covid, we made lots of great developments in this area. It has made cash handling much easier because we have history for all our partners in a central database.” 
    Emilia N., a Director of External Restructuring for Santander Bank Polska, agrees. “We are very lucky to have one system for the whole process, right through to the write off or the debt sale,” she says. “We have all types of customers in this one system. No matter the segment of the customer, no matter the maturity of the debt, we can see all the information in one place.”
  • Take legal action: The results of Intrum’s survey show businesses don’t shy away from this option – 55 per cent say they use legal action as a tool. However, it is important this is seen as a last resort for reasons of cost and to preserve valuable customer relationships. Though different approaches will suit different businesses, legal action to recover small debts from consumers may be disproportionate and uneconomic, for example. 

    “We avoid the legal route as much as we can because it’s expensive, slow, and the return rate is low, but sometimes there is no other option,” says Sofia L., business analyst for Vodafone Portugal. 

What’s on the horizon?

Ultimately, the downturn has placed additional pressures on businesses when it comes to credit management and collections. The drain of chasing poor payment is likely to be an ongoing challenge. 

Insights from the European Payment Report 2023

These insights are taken from our latest European Payment study. You can access the full European Payment Report 2023, a white paper breaking down the countries' results, plus a recording of our webinar below.