International ARM: Few Debts Written Off in Eastern Europe, Better Cash Flow in Western Europe

Hamburg, Germany – Good news for Eastern European companies: they seldom suffer from bad debts. In Russia, companies only have to write off 1.8 % of invoices. In Slovakia the figure is 1.9 % and in Poland 2.3 %. The proportion of bad debts in Spain (4.7 %) and Greece (5.0 %) is particularly high. This emerged from the EOS Ten Nations Survey 2010 ‘European Payment Practices.’ Together with Ipsos, the market research institute, the international EOS Group, which provides receivables management, marketing and risk information and payment services, surveyed local payment practices at 2200 companies in ten European countries.

Company cash flow tells a different story. In this case, Western companies are doing better than their East European counterparts. Only 9 % of German companies have experienced cash flow problems because of payment defaults. The figure in Great Britain and Belgium was 10 %. It was considerably higher in the other countries surveyed. Companies in Romania (31 %) and Greece (23 %) were most frequently affected by cash flow problems. 21 % of those surveyed in Poland and Bulgaria had payment problems.

"The macroeconomic situation in the countries surveyed corresponds to the results of our survey. If the availability of sources of corporate finance is reduced, even a low level of bad debts can endanger cash flow," says Hans-Werner Scherer, Chairman of the Board of Directors of the EOS Group, commenting on the results of the survey.

Value of professional receivables management acknowledged

Another result of the EOS survey: professional receivables management is almost taken for granted at Western European companies. This applies to both the use of internal specialists and cooperation with specialist service providers. Almost half (45 %) of British, Greek and Spanish companies employ internal credit and receivables management specialists. In Slovakia, only 19 % of businesses have their own experts. In Romania, the figure is 27 %. Particularly in Germany (89 %) and Belgium (78 %), companies rely on external support. Only 3 % of businesses in Russia work with attorneys or debt collection companies. The figure in Bulgaria is around 27 % and in Slovakia 36 %.

Inconsistent assessment of payment behaviour

Companies covered by the international survey evaluate the future development of payment behaviour differently. In Greece, for example, over half (52 %) of businesses fear a further decline in payment behaviour.

In Great Britain, almost two thirds (63.8 %) of those surveyed assume that there will be no change in payment behaviour. In Russia, by contrast, one third (34.3 %) expects that willingness to pay will improve. There is agreement on the assessment of receivables management. On average, well over three-quarters of all business assume that the importance of receivables management will remain the same or increase in future.

"The international survey shows that companies gain from taking a professional approach to receivables and credit, particularly in times of economic difficulty," says Hans-Werner Scherer. "The vast majority of decision-makers have recognised the importance of receivables management under the pressure of the crisis."

The EOS Ten Nations Survey 2010 "European Payment Practices"

In spring 2010, in cooperation with the independent market research organization Ipsos, the EOS Group asked a total of 2200 companies in five countries about prevailing payment practices in their respective countries. 200 companies in each of the United Kingdom, Spain, Greece, Romania, Russia, Slovakia, Bulgaria, Poland and Belgium and 400 companies in Germany answered questions on all aspects of their payment experiences, economic trends in their home country and risk and receivables management in general. Further results from the survey can be found online at www.eos-solutions.com/surveys.

About The EOS Group
The EOS Group is one of the leading international providers of individual services connected with the customer relationship life cycle – from customer acquisition to electronic payments processing and ultimately debt collection and factoring. The main focus is on receivables management. EOS stands for high-quality debt collection for the protection of creditors and consumers. With over 5,000 employees and more than 40 subsidiaries, EOS provides services for 20,000 clients in more than 20 countries around the world. For more information, see: www.eossolutions.com.