Forecasts anticipate Ireland’s growth in 2022. However, a large proportion of the businesses polled in the country expressed a note of caution. Unknowns over the pandemic are still many.
In this year’s Payment Practices Barometer survey in Ireland, we polled businesses in the construction, steel/metals and services industries about the payments behaviour of their B2B customers. Overall, their story appears to be a positive one. However, a large proportion of the businesses we spoke to expressed a note of caution, pointing to the still many unknowns concerning the pandemic. Against this background, it is important for businesses to be alert to this risk and make contingency survival plans.
Key takeaways from the report
- Based on survey results for Ireland, trade credit involved 49% of all Irish respondents' B2B sales this year, down from last year’s 58%. Requests for trade credit were turned down
most often due to poor customer credit quality, representing a higher risk of payment default.
- This year, late payments from B2B customers affect on average 40% of the total value of B2B invoices in Ireland. This represents an improvement on last year’s 50%. 8% of the total value of this year’s B2B invoices was written off as uncollectable. Last year this was 10%.
- 67% of the businesses we polled in Ireland opted to mitigate customer credit risk in-house this year. Ideally this involved setting aside funds to absorb the hit of any bad debts. For a large number of the businesses polled, in-house credit risk management proved costly. Many told us they incurred increased costs of financing trade receivables through external sources.
- 54% of businesses polled across Ireland reported frequent outsourcing of credit risk management through a credit insurance policy.
- Looking ahead, most of the businesses we spoke to across Ireland expressed optimism, and predict growth for 2022.
- 42% told us they plan to provide customer credit either as a way to offer finance to customers in financial distress or to stimulate demand. This may reflect the opinion that downside risks remain. This is due to the still many unknowns surrounding the pandemic.
- When asked which pandemic-induced changes will become a permanent feature of the way they operate, nearly half of the businesses polled across Ireland told us that they have permanently integrated digital innovations in their business operations. Many also told us that they had adapted to permanent changes to supply chain.
Interested in getting to know more?
The Payment Practices Barometer report for Ireland gives insights into B2B payment practices and businesses' approach to the management of customer credit risk in the following local industries:
For a complete overview, please download the full country report available in the Related documents section below. The Statistical Appendix and regional Payment Practices Barometer survey results are also available free to download.
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