Hungarian firms tend to determine increasingly strict deadlines, leading to many clients asking for delays, which may become a challenge for companies in case of an economic downturn, according to a report by debt management firm Intrum.
Intrum says that its survey of company heads in 29 European countries, including 450 in Hungary, revealed that Hungarian companies are among the most impatient on the continent when it comes to payment deadlines.
On average, firms give an 11-day deadline for B2C transactions, and 24 days for B2B ones. The most lenient deadlines (31 days) are given to institutions in the public sphere.
Contrastingly, the EU average for B2C transactions is 21 days, while the average deadline for B2B transactions is 34 days. For public institutions, companies give a 33-day deadline on average.
Trends show that in Hungary B2C payment deadlines are getting stricter, down from 16 days in 2016, and 14 days in 2017. However, the low of 11 days is unchanged since last year. On the other hand, deadlines for B2B and public institution payments are getting longer, up from 20 days and 22 days in 2016, respectively.
Delays in Hungary are short compared to European ones, with only 22% of claims older than a month. The EU average is 35%.
"The shortening of the determined deadlines is connected to the improvement of the payment morale of consumers: since 2016, the time elapsed between completion and actual payment has almost halved," says Károly Deszpot, director of sales and business at Intrum Hungary. "This is in line with our earlier research investigating the paying capacity of the population, which revealed that expenses are causing fewer and fewer problems to Hungarian households. The over 4% GDP growth in the last period makes it understandable that late payments are causing fewer problems for people and companies, too."
Even so, Deszpot notes that the current economic boom will not last forever, and weaker conditions may cause troubles. Last year, 70% of companies were asked to extend payment deadlines, and 65% of them had to accept late payment. Despite this, 60% of companies took no precautionary measures against late payments.