Survey reveals late payments The decline for the U.S., global companies

For U.S. businesses, getting paid for their products and services during the global economic recession is not a black-and-white issue-it's about staying out of the red.

This week, international trade credit insurer Atradius, based in Hunt Valley, Md., released its semi-annual "Payment Practices Barometer" report based on a survey of more than 3,500 companies located in the United States, China, Hong Kong, Mexico, Canada, Belgium, Denmark, France, Germany, Great Britain, Italy, the Netherlands, Spain, Sweden, Switzerland, Ireland, Austria, Poland, Czech Republic and Australia. The global survey's objectives included:

    - Determining how many days business partners take to pay invoices and if
      payment expectations match actual pay practices
    - Comparing payment behavior across borders

"It is essential for companies to understand the payment behavior of their current and prospective customers to reap profits instead of pitfalls," said Brett Halsey, President, Atradius Trade Credit Insurance, Inc. "Delayed pay can create cash-flow problems for companies of all sizes. While our barometer offers a snapshot that points toward more positive payment behavior trends, if you compare our numbers June 2008 to June 2009, the U.S. expected default frequencies remain three times higher and insolvencies are up by 64%. The bottom line is that in a post-September 2008 business environment, there is no substitute for timely, detailed information about your specific buyers."

    Key survey findings included:

    - Overall, payment behavior is improving around the globe.
    - The U.S. offered the highest ratings for domestic payment practices.
      Spanish respondents ranked the lowest.
      U.S. (74% of respondents) and Canada (68%) rate domestic payment
      behavior as being "good", "very good" or "excellent". Nearly 27% of
      U.S. surveyed companies reported domestic payment behavior as "poor"
      or "fair". On the contrary, Spain (71% of respondents), Italy (67%)
      and France (66%) rate domestic payment practices as being "poor" or
      "fair".
    - U.S. companies experience a nine-day payment gap, on average,
      as average payment terms in the U.S. remain 30 days with average
      domestic payment rendered within 39 days. U.S. respondents considered
      domestic payment delays "rather infrequent" and payment default
      occurrences "very infrequent." The average domestic payment duration,
      defined as the time lapse between the issue of an invoice and its
      payment, ranged from 28 days (in Denmark, Poland and Germany) to 78
      days (in Italy).
    - Foreign payment behavior, overall, was perceived to be almost as
      good as domestic payment behavior. About 20% of U.S. respondents
      assessed foreign payment behavior as "poor" or "fair". Foreign payment
      duration, on average, is 45 days, presenting the widest gap between
      payment term and payment duration of the 20 countries surveyed.
      Globally, foreign payment duration ranged from 25 days in Poland to 66
      days in Italy.
    - U.S. payment behavior is considered "good" by international business
      partners, which marks an improvement in the U.S. ranking compared to
      results garnered during the winter 2008/2009 payment practices survey.
      Globally, payment delays by foreign business partners occur least often
      in Mexico and most often in Germany; foreign payment defaults occur
      least often in the Czech Republic and most often in Hong Kong.
    - Payment behavior of foreign customers assessed as "good"

In comparison to the winter 2008/2009 survey responses, customers in the surveyed countries paid their international business partners sooner, except for in the Netherlands and Switzerland. Average payment duration decreased as many as 15 days in Italy to 1 day in Portugal.

The full "Atradius Payment Practices Barometer" survey and its methodology can be downloaded from http://www.atradius.com.

About Atradius:

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence in 42 countries. Its products and services aim to reduce its customers' exposure to buyers who fail to pay for the products and services they buy. With total revenues of more than EUR 1.8 billion and a 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit. With 160 offices, it has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily.