This study is the very first Coface survey on corporate payment experience in the Netherlands.
Originally, this survey had been conducted between February and early-March 2020 (the first quarter of 2020, Q1 2020), with 301 participating companies located in the country. However, at the end of the survey period, COVID-19 struck the world and changed the economic outlook drastically. Accordingly, in order to factor in this change of companies’ payment experience, we conducted a new survey between early-May and late- June (the second quarter of 2020, Q2 2020), in which 114 companies participated. The results differ remarkably within these few months. Admittedly, some might be due to the different set of participants, but others mirror the new economic status-quo.
Payment terms are an interesting case in the Netherlands. Only 42% of participants in the Q1 2020 survey answered that they offer payment terms, and this figure increased only slightly to 48% in Q2 2020. Short-term credit periods dominate the Dutch business landscape, with 85% of companies that offer payment terms requesting a payment within 60 days.
The economic outlook has changed completely in a few months. In Q1 2020, every sector was overall positive on the business outlook for 2020, with pharma-chemicals being the most optimistic and construction the least. However, in June 2020, 52% of surveyed companies expected a negative business development in 2020. This economic contraction is threatening the survival of some of the participating companies. One third of them have applied or plan to apply for State aid, while another 7% are unsure and could resort to it if the economic situation worsens. Accordingly, priorities regarding the biggest threats to the business outlook have changed. While in early 2020, Brexit seemed to be the main problem, it changed to the effects of COVID-19 on the world economy and to disruptions of global production chains. This could be one reason explaining Dutch companies’ loss of trust towards China, and their stronger preference in Emerging Asia as the destination with the biggest opportunities.
Between the first and the second quarter of 2020, the distribution changed, with a decrease in the short- to middle-term period (between 31 and 60 days) and an increase within the very short-term segment (1 to 30 days). While this change could be related to the much smaller set of participants, it also gives the impression that participants may be nervous about payment morale and prefer to cash in as early as possible. These concerns are not unfounded. The number of participants who reported payment delays increased from 71% in Q1 to 75% in Q2 of 2020, which means that in our sample, three out of four companies are struggling with payment delays. The companies reported that the average duration of payment delays is high: 66 days in the first quarter, 58 days in the second quarter. The retail sales-textile-clothing sector stood out with the longest payment delay period. The share of turnover related delayed payments, which are overdue by more than six months, is a concerning issue in the Netherlands. Overall, they remain low, but the distribution changed somewhat on the higher end. While in Q1 2020, only 3.6% of participants answered that overdue payments accounted for 5% or more of their turnover, the number increased to 9.6% in Q2.
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