Late payment costs European companies €350 bln

European companies lost €350 billion ($450 billion) last year due to late or unpaid bills, underlining fears that small businesses expected to drive economic recovery are faltering in a prolonged recession. The figure amounted to 3% of all receivables and was a 7% increase on 2012, when companies wrote off €340 billion, Swedish credit management services group Intrum Justitia’s ‘European Payment Index’ showed on Monday. Against the backdrop of the economic downturn and restricted bank lending in Europe, experts fear that the mountain of unpaid bills will drive up insolvency and job losses, reduce cross-border trade and snuff out any recovery. Late or non-payment for services has long been a problem for Europe’s smaller companies, especially in businesses such as supermarkets, which are renowned for driving hard bargains and squeezing suppliers. The index, based on a survey of 9,800 companies in 29 countries in Europe, reflected the gap between economies in the north and those in the south. Businesses in Greece, Cyprus, Hungary and Portugal were among the most at risk from the effects of late or unpaid bills, while Nordic nations, along with Germany, Switzerland and Austria, were least in danger. However, Lars Wollung, president and chief executive of Intrum Justitia, said weaker confidence indicated a bleak outlook for the whole of Europe.