The use of trade credit in B2B sales strategy continues to play a hugely significant role for companies in the United Kingdom.
Key takeaways from the report for the United Kingdom
The 2024 Payment Practices Barometer survey for the United Kingdom was conducted between the end of Q1 and the beginning of Q2 2024. The findings should therefore be viewed with this in mind.
Trade credit plays vital role amid cashflow concerns
- Trading on credit continues to be an important element in the B2B sales strategy of companies in the United Kingdom. Nearly two-thirds of all sales are currently being transacted on credit, showing stability from the previous year. The primary motivation is to maintain a competitive edge, particularly in the construction and electronics/ICT sectors.
- Longer payment terms are being offered by businesses in the electronics/ICT and consumer durables industries, both averaging a couple of months from invoicing. Payment terms are stable in the UK construction sector, standing at an average 48 days from invoicing, and serve as a risk management strategy to maintain financial resilience.
Widespread worry about increased risk of insolvencies
- The health of the domestic economy is the major concern looking ahead for companies in the United Kingdom, with high interest rates and tight monetary policy constraining
financial access and hindering investment. In an economy where the services sector plays a pivotal role there is worry that rising costs in this area will push inflation higher.
- Geopolitical uncertainties are another issue of concern for UK businesses. This could further destabilise costs and disrupt delivery times, exacerbating inflationary pressures.
A particular short-term anxiety in the electronics/ICT sector is the threat of cybersecurity problems.
The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers.
Interested in finding out more?
For a complete overview of the 2024 survey results for the United Kingdom and Western Europe, please download the full reports available in the related documents section below.
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