B2B payment practices trends, Asia 2024

The 2024 Payment Practices Barometer survey for Asia was conducted during Q3 2024, and findings should therefore be viewed with this in mind.

Key takeaways from the report for Asia

B2B late payments present profitability challenges for Asian companies

• Late payments are still a major issue for Asian companies, currently affecting an average 46% of B2B credit sales. Bad debts now stand at an average 4% of all B2B invoices, creating additional financial strain. Cashflow problems are cited by 42% of businesses in Asia as the reason for late payments from B2B customers. Inefficient payment processes among B2B customers is another major factor. Invoices now take an average one month beyond due to be cashed, and many companies respond by slowing down payments to suppliers.

• Many companies in Asia tell us they face increased legal and collection costs as well as cashflow issues due to late payments, which can quickly deplete financial resources and erode profitability. Most businesses in our survey of Asia say they bridge liquidity gaps by looking to external finance, with 60% requesting supplier credit.

Asian companies split over insolvency risk outlook in the months ahead

• Caution is evident in concern about ongoing credit risk challenges. This is highlighted by a divided outlook for insolvency risk among businesses across Asia. 49% of companies, especially in India, expect insolvencies among B2B customers to worsen in the coming year, but others anticipate a positive trend.
   
• The main concern looking ahead for Asian companies is the impact of uncertain domestic and global economic conditions, with 35% of companies anxious that it could significantly affect business prospects. Many companies are also increasingly worried they will face major customer acquisition challenges.

The global economy is set to grow by 2.7% this year, but weak demand and tight credit conditions are straining businesses. We expect global insolvencies to increase by 23% in 2024, and China's current economic slowdown is raising concern about rising insolvencies among many Asian companies. This could lead to deteriorating credit quality and B2B payment behaviour in several economies across Asia.

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 comprehensive overview of the 2024 survey results in Asia, please download the full reports from the related documents section below.

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