Swiss SMEs are significantly more positive about the future than the European average

Falling debtor risks and no fear of Brexit: this is how positively Swiss SMEs view the near future. Swiss companies are also well ahead of the rest of Europe in terms of risk mitigation: more than half of all Swiss companies surveyed (55 percent) say they use some form of credit assessment - compared with only one in four companies in the rest of Europe that resort to this hedging tool. These are - in brief - the key findings of Intrum's European Payment Report, which describes the impact of late payments on the development and growth of European companies.

Financial shortages, carelessness and intent - as reasons for late payment.

The Swiss companies surveyed still see financial difficulties as the main reason for late payment by their customers (81%, -4%), but carelessness or general administrative challenges have again increased as a risk factor since last year: by 4 to 74%. Companies also continue to see deliberate delay as one of the main reasons for unpunctual payment (68%, +/-0%). When it comes to payment, Swiss companies have tended to catch up with the European average - after an upswing in the previous year. Last year, Switzerland had paid even faster than the EU average with comparatively long average payment periods. However, both values have now risen again compared with the previous year - in other words, Swiss companies are granting longer payment periods and are actually also being paid more slowly again.

Liquidity, losses and high interest costs - as risks after late payment

One in three companies is facing liquidity bottlenecks due to late payment of receivables, and a quarter of the companies surveyed in Switzerland say they will have to accept a drop in sales. And while the fear of higher interest costs has almost doubled, one in five companies continues to fear weaker growth as well.

Swiss SMEs are more optimistic about the coming year

One in five SMEs in this country expects their customers to pay with better payment behavior in the next twelve months than at the time of the survey. This is an optimistic view shared by only one in ten companies in our neighboring European countries - half as many as in Switzerland. 7 out of 10 of the Swiss companies surveyed have already accepted payment terms that were longer than they would have liked. The public sector in particular seems to have increasingly asked for longer payment periods over the past year (27%, +8%) and, according to the study, received them (29%, +9%). "Late payment and non-payment lead to a negative spiral - sales losses, liquidity bottlenecks and thus growth blockades can be the result. Especially for SMEs - the backbone of our economy - which are hit hardest. This is where Intrum comes in and supports the willingness of consumers to pay SMEs," says Thomas Hutter, Managing Director Intrum AG. Companies still try to protect themselves from these increasing risks of late payments and defaults mainly through credit checks and debt collection measures.

And the European GDPR?

The EU General Data Protection Regulation (GDPR) represents the most important change in data protection regulations in the past 20 years and aims to harmonize data protection laws in Europe. In Switzerland, the responsible committee of the National Council has split the total revision of Swiss data protection rules in two. Against this background, it is understandable that only 8% of the companies surveyed in this country see any impact at all on payment processes. Companies in this country also see both the impact on their business as very low - both the rather positive impact (4%) and the rather negative impact (6%).

The Weakening EU and Brexit - Impact on Swiss SMEs

Most Swiss companies are relaxed about the challenges in the EU. However, almost one in eight companies (13%) still sees a weakening EU as an opportunity rather than a threat - and is thus right at the front of the pack in a European comparison (5%), directly behind the UK (25%).

Source: Intrum AG