EOS Study "European Payment Practices 2025":
Payment morale in Europe continues to decline.

Around 18 billion invoices are issued across the EU every year, but payment morale in Europe is in a bad state: Approximately one in four invoices is paid late (19 percent) or not at all (5 percent). This is shown by the EOS study "European Payment Practices 2025", for which 2,200 financial managers from 11 countries were surveyed.

Switzerland is among the countries with the best payment morale: here, 17 percent of payments were received late, and 4 percent were uncollectible. Germany (21 percent) and France (22 percent) also perform comparatively well. In Romania, 29 percent of defaulting payers settle their invoices late or not at all. This makes payment morale there the worst in a European comparison.

European companies primarily cite short-term liquidity bottlenecks of their private customers (54 percent) and forgetfulness (51 percent) as reasons for late payment or even payment default. In Switzerland, as many as 58 percent of companies suspect forgetfulness as a reason for payment delays, with temporary liquidity bottlenecks (53 percent) being the second most frequently mentioned by respondents.

For business customers, the European average primarily cites payment defaults by their own customers (61 percent) and the exploitation of supplier credits (57 percent) as reasons. However, slow, non-digitized processing procedures (48 percent) also likely cause delays, according to the respondents. 43 percent see over-indebtedness and insolvencies of their business partners as the cause of unpaid invoices.

Particularly challenging for companies: Some customers apparently do not pay late by mistake. Around a third of European companies assume that both business customers (31 percent) and private customers (34 percent) deliberately do not pay their invoices. In Switzerland, 33 percent suspect intentional non-payment from their private customers and 30 percent from their business customers.

As a result of poor payment morale, European companies grant their customers less time to settle open invoices. At an average of 31 days, the set payment term is at a low in the ten-year trend (business and private customers). In 2015, it was still 34 days, and in 2022, even 37 days.

Private customers in Europe are now granted an average of only 23 days to pay, and business customers 36 days. Only Spanish companies are more generous: they grant their private customers a comparatively long period of 31 days and business customers 42 days. Switzerland is almost at the European average: Here, private customers have 24 days to pay their invoices, business customers can expect 34 days.

Payment delays and defaults are not without consequences: Almost every second surveyed company stated that it had suffered profit losses in the past because of this (48 percent), 46 percent stated that this led to higher interest costs. For every fifth company (22 percent), investments were cut or halted. In France and Slovenia, every fifth company even had to fear for its existence; the European average is 16 percent. In Switzerland, the consequences were less drastic: Only 11 percent of respondents cut their investments or faced an existential threat.

Eva Griewel, CFO of the EOS Group: "The longer companies have to wait for their money, the more likely it is that the invoice will not be paid at all. In this respect, payment morale is an important indicator for potential payment defaults. If the number of such defaults increases sharply, it can drive creditor companies themselves into insolvency, with the resulting negative effects such as the loss of numerous jobs."

"Our current study shows that poor payment morale in Europe represents a serious challenge for companies. Although NPL (Non-Performing Loan) volumes at banks are currently at a low level overall, we must not underestimate the impact of delayed or outstanding payments. Companies should prepare, because this development places high demands on companies' liquidity management," warns CEO Marwin Ramcke.

The consequences of poor payment morale for creditors can be mitigated with professional dunning. However, so far only 37 percent of European companies rely on external support for receivables management. In Switzerland, the proportion is lower at 33 percent, with 58 percent of companies there handling the collection of outstanding debts exclusively themselves. Just under a third of European companies take a dual approach, handling outstanding payments both internally and through external service providers. On average in Europe, only 7 percent consistently rely on professionals in receivables management.

"For creditors worldwide, receivables management is becoming increasingly complex and riskier, also due to the globally uncertain situation," says Marwin Ramcke. In view of their customers' declining payment morale, companies should therefore carefully weigh the economic risks of payment delays and defaults and consider collaborating with a professional debt collection service provider.

"For creditors worldwide, receivables management is becoming increasingly complex and riskier, also due to the globally uncertain situation," says Marwin Ramcke. In view of their customers' declining payment morale, companies should therefore carefully weigh the economic risks of payment delays and defaults and consider collaborating with a professional debt collection service provider.