Long Payment Terms Continue to Slow Down Business Owners. 41 % of the Respondents Struggle With Them

31. January 2020

At the end of the year 2019, companies Roger a GRiT were examining the issue of invoice due dates. A total of 117 GRiT‘s Czech and Slovak customers filled in the questionnaires. As it turned out, almost half of the survey respondents struggle with long payment terms. More than 70% of them don‘t know how to solve this problem. The following findings are the most interesting:

  • 41 % of the respondents are dealing with long payment terms,
  • 57 % aren‘t happy with the long payment terms,
  • 70 % of the companies don‘t know what to do about the long payment terms.

Legal Restrictions Haven‘t Fully Solved the Issue of Payment Terms

Despite the fact that the maximum payment terms have been shortened by law to the basic 30-day period, over 41% of the respondents have experience with customers exceeding this period. This percentage is further influenced by the fact that legislation recognizes an exception provided that the creditor isn‘t being treated in a grossly unfair way, which is difficult to prove.

The number of the respondents who have experienced some trouble as a result of having long payment terms was also high. But surprisingly, 48% of them are doing nothing to resolve these issues and as many as 70% of the surveyed aren‘t aware of any way of shortening their payment terms.

The Respondents Would Prefer a Service for Shortening Invoice Payment Terms Online

If the respondents were to look for a solution that would shorten their invoice payment terms, the biggest benefit for them would be the option of using a service directly from the customer interface or one that is implemented in the accounting system. The ORiON EDI solution provides this very option. Customers can follow the real-time status of invoices and payments not only within the application, but also via customizable e-mail notifications. Thanks to this, the company which sends their invoices via OriON can keep track of what is happening with the invoice in question. In addition to that, customers can see if the invoice has been sent correctly and if it has been copied into the ERP system of their customer, and they will be notified that the invoice is being processed. In the case of invoices with longer payment terms, the customer can also opt for invoice financing through Roger, available directly through the user interface.

Roger can help small to medium-sized companies pay 75% of the amount of the invoice within three days. Often more cheaply than banks and other companies. The remaining 25% are cleared after the customer has paid.

Despite the fact that due dates have been taken more seriously since the maximum payment terms were set, it is clear from our findings that:

they are not always respected, even 30 days can be too much for some small and medium-sized companies. This can lead to cash flow fluctuations and a lack of resources for development, salaries and the running of the company, companies aren‘t aware of the options of financing their business available on the market, companies appreciate the option of financing an unlimited number of their invoices, it makes sense to continue educating the market about invoice financing services. In the case of Roger, we need to present the Payment by Roger, which is integrated into OriON EDI and brings companies the desired level of comfort – all online and within the customer interface.

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