As an informed exporter, it is important to know the major economic indicators of the countries where you are exporting. This is important to foresee if there are any possible chances of payment defaults. If there is, changes can be made in the payment terms. Hence, in order to aid this decision making process, we present the findings provided by the Euler Hermes in weekly frequency. Major indicators like GDP, sectoral development changes, major economic policies decision, sentiments after any new political appointment, bank rate changes etc. help in painting the economic condition of the country for the whole week.

Western Europe is facing its first annual increase in insolvencies in years. 2019 is predicted to end with a 2.7% rise in insolvencies, a trend that is expected to continue in 2020

Slowing economic growth, the escalation of the US-China trade war, and looming uncertainty surrounding the future relations between the UK and the EU are the key drivers of the upswing in business failures across Western Europe.

There is no end to challenging times in sight this year, and the forecast for next year is not positive either. The global business environment has deteriorated and is expected to remain troublesome over the coming months. Insolvencies are expected to increase again in 2020, putting the financial stability of businesses under severe strain

Businesses are offering trade credit to their B2B customers, far more often than last year, to support growth of domestic demand and stay competitive on foreign markets.

On average, in Western Europe 60% of the total   transactions value of their sales to B2B customers . This compares to 67% in Eastern Europe, 51% in the Americas and 55% in Asia-Pacific. However, the use of B2B trade credit varies markedly across the countries surveyed. Respondents in Denmark seem to be the most likely to offer trade credit to their B2B customers i.e. 75% of the total value. Across the other countries surveyed in the region, the proportion of B2B sales made on credit ranges from a high of 68.% in Greece, to a low of 45% in France.

On average, nearly 30% of the total value of the B2B invoices issued by respondents in Western Europe over the past year remained unpaid at the due date. By country, this percentage climbs to a high of 35% in the UK and 34.8% in Greece and drops to 20.3% in Denmark, the lowest of the countries surveyed.

Payment terms have remained fairly consistent, with businesses showing reluctance to offer longer terms. Not unexpectedly, due to the ongoing uncertainty surrounding the future relations between the UK and the EU, and the related bleak insolvency outlook for the UK and Ireland, suppliers surveyed in both countries requested B2B payments much earlier than last year. In the UK, average payment terms stand at 20 days (down from 24 days last year) and in Ireland at 28 days (down from 31 one year ago).

Assessing buyers’ creditworthiness is the most common credit management activity in Western Europe. A survey data shows respondents from Greece perform creditworthiness checks significantly more often than their Western European peers. Western European businesses also send dunning letters (outstanding payment reminders) to chase unpaid invoices.

Trade Credit policy, is the solution for businesses to safeguard against the risk of a devastating financial loss caused by an insolvent buyer”.

Source: www.Atradius.com