Many enterprises continue to finance their debtors.
The report “Portfolio of Receivables of Polish Enterprises” prepared by the KPF (Conference of Financial Companies in Poland) and KRD BIG SA demonstrates that over one tenth of entrepreneurs lose the equivalent of 10-19% of the whole incurred costs due to unreliable payments of their debtors, and 1 in every 16 entrepreneurs may lose even the amounts equivalent to 20-29% total costs. The average cost borne by entrepreneurs has fallen from 6.5% to 6.1% in the Q3/Q4 comparison.
In practice, in Polish economy, 1 in every 4 entrepreneurs is unable to fulfil its obligations on time. On the other hand, the negative influence of delays on the realisation of investments has increased. Investments are essential for building competitive advantage or to maintain market share, and as a result, they affect the intensification of national economic growth. In the latest survey 28.5% of companies declared that the existing delays had a negative influence on the possibility to realise investment projects. Moreover, 4.6% of the companies claimed that they had to reduce employment as a result of delays in the payment of receivables.
However, there is also some good news, i.e. only one fifth of all invoices are not paid on time. On the other hand, the report points out some bad news as well. The SME sector, as opposed to corporations, has still not drawn any conclusions from the last recession and it still does not pay sufficient attention to verifying their business partners or to evaluate contract risk. This is precisely what leads to problems with recovering debts that so many entrepreneurs complain about. Only improved education and increased economic awareness will allow entrepreneurs to focus on developing their own businesses. – concludes Adam Łącki, President of the Board of the National Debt Register maintained by Biuro Informacji Gospodarczej (Economic Information Bureau) SA.
Published on: 11 February 2016