EOS Study "European Payment Practices 2025":
Payment morale in Europe continues to decline.

Around 18 billion invoices are issued across the EU every year, but payment morale in Europe is in a bad state: Approximately one in four invoices is paid late (19 percent) or not at all (5 percent). This is shown by the EOS study "European Payment Practices 2025", for which 2,200 financial managers from 11 countries were surveyed.

Compared to other countries, payment morale is highest in Switzerland and Germany. Here, 21 and 22 percent of payments, respectively, were received late or were uncollectible. In Croatia payment morale is exactly at the European average: 19 percent of payments were made late, and 5 percent of receivables remained unpaid. In Romania, 29 percent of defaulting payers settle their invoices late or not at all. This makes payment morale the worst in a European comparison.

European companies primarily cite short-term liquidity bottlenecks of their private customers (54 percent) and forgetfulness (51 percent) as reasons for late payment or even payment default. In Croatia, temporary liquidity shortages rank first at 62 percent – the highest value in comparison with all countries in the survey. Forgetfulness is rated second (60 percent), long-term over-indebtedness and personal bankruptcy ranks third (51 percent). 

For business customers, the main reasons cited on average across Europe are payment defaults by their own customers (61 percent) and the exploitation of supplier credits (57 percent). However, slow, non-digitized processing procedures (48 percent) also likely cause delays, according to the respondents. 43 percent see over-indebtedness and insolvencies of their business partners as the cause of unpaid invoices. In Croatia, the picture is almost the same: Here, payment defaults by their own customers and the exploitation of supplier credits each account for 56 percent. In third place, at 52 percent, there are slow and non-digitalized processing procedures. 

Particularly challenging for companies: Some customers apparently do not pay late by mistake. Around a third of companies assume that both business customers (31 percent) and private customers (34 percent) deliberately do not pay their invoices. In Croatia, as many as 48 percent of respondents suspect deliberate non-payment among their private customers – 14 percentage points more than the European average and the highest figure among all countries surveyed. 33 percent suspect their business customers to delay payments deliberately.

As a result of poor payment morale, European companies grant their customers less time to settle open invoices. At an average of 31 days, the set payment term is at a low in the ten-year trend (business and private customers). In 2015, it was still 34 days, and in 2022 even 37 days. 

Private customers in Europe are granted an average of only 23 days to pay. Only Spanish companies are more generous: they allow a comparatively long period of 31 days. In Croatia private customers are expected to pay their liabilities within 24 days.

Business customers in Europe have an average payment term of 36 days, thus 13 days longer than private customers, in Croatia business customers also can expect 35 days.

Payment delays and defaults are not without consequences: Almost every second company stated that it had suffered profit losses in the past because of this (48 percent), and 46 percent stated that this led to higher interest costs. For every fifth company (22 percent), investments were cut or halted. In France and Slovenia, every fifth company even had to fear for its existence; the European average is 16 percent. In Croatia the picture is similar: 51 percent of respondents report a loss of profits, 47 percent face higher interest expenses. 32 percent of Croatian companies said they face liquidity shortfalls. 21 percent of stated that they reduced investments and 11 percent feared for their company’s survival – which is, together with Switzerland, the lowest figure among all countries surveyed.

Eva Griewel, CFO of the EOS Group: "The longer companies have to wait for their money, the more likely it is that the invoice will not be paid at all. In this respect, payment morale is an important indicator for potential payment defaults. If the number of such defaults increases sharply, it can drive creditor companies themselves into insolvency, with the resulting negative effects such as the loss of numerous jobs."

"Our current study shows that poor payment morale in Europe represents a serious challenge for companies. Although NPL (Non Performing Loans) volumes at banks are currently at a low level overall, we must not underestimate the impact of delayed or outstanding payments. Companies should prepare, because this development places high demands on companies' liquidity management," warns CEO Marwin Ramcke.

The consequences of poor payment morale for creditors can be mitigated with professional receivables management. However, so far only a minority manages their receivables management with external support. Just under a third (30 percent) of companies take a dual approach, handling outstanding payments both internally and through external service providers. In Croatia, the figure is at 25 percent and therefore below European average. Only 7 percent of European companies consistently rely on professionals in receivables management. In Croatia the figure is exactly in line with European average.

"For creditors worldwide, receivables management is becoming increasingly complex and riskier, also due to the globally uncertain situation," says Marwin Ramcke. In view of their customers' declining payment morale, companies should therefore carefully weigh the economic risks of payment delays and defaults and consider collaborating with a professional debt collection service provider.