Late payments are a widespread problem for small and medium-sized enterprises in Europe. 73 percent of enterprises experience late payments, and for every third it is a systemic problem that threatens their survival, according to a statement from SME Denmark.
The study from the European Commission is based on responses from 3,503 enterprises across the EU and also shows that almost 60 percent of late payments occur in B2B relationships. Large enterprises often pressure smaller suppliers with long payment deadlines and unilateral contract changes - without consequences.
63 percent of enterprises want statutory maximum deadlines, preferably 30 days. Almost half also demand stricter sanctions against enterprises that do not pay on time.
- It is completely unreasonable that SMEs in Denmark and the rest of Europe should act as free banks for large enterprises that withdraw payments for weeks and months. If you have received a product or service, you should pay for it as soon as possible. That should be a given, but unfortunately it is far from that, says Jesper Beinov, CEO of SME Denmark.
The EU Commission's proposal for fixed payment deadlines has met with resistance in the Council of Ministers, even though the European Parliament voted in favor in April 2024. The Commission's work program, which will be published on October 21, will reveal whether the proposal will be maintained. SME Denmark calls for a stand:
- We have a unique opportunity to change a culture where the strongest dictate the terms at the expense of the small. That is why we at SME Denmark are also following the process closely. We call on the Commission to maintain the proposal and the Danish government to initiate discussions when we know whether the Commission is prepared to continue the fight, says Jesper Beinov.
According to an assessment from Intrum, faster payments could free up up to 275 billion euros – over 2,000 billion DKK – in liquidity annually in the EU, equivalent to more than the entire GDP of Finland.
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