B2B payment practices trends, Denmark 2024

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights a cautious approach to customer credit risk among companies in Denmark, with a notable decline in B2B sales transacted on credit, now averaging 43% of all sales [6][8] - There is a significant increase in bad debts, which now account for 8% of all B2B sales, up from 3% the previous year, indicating complexities in managing customer credit risk [7][8] - Companies express concerns about the domestic economy, with high household debt constraining consumer spending and impacting B2B trade [18][20] Summary by Sections B2B Payment Practices Trends - A downward trend in B2B sales on credit is evident, with 43% of sales now on credit, reflecting a cautious approach to minimize credit risks [6][8] - The electronics/ICT sector shows the most caution, while chemicals and machines sectors are more open to credit transactions [6] - Payment terms vary significantly, with chemicals offering shorter terms of one month, while machines and electronics/ICT sectors offer longer terms of 58 days and 36 days respectively [6][8] Key Figures and Charts - Late payments affect 49% of all B2B credit sales, down from 54% the previous year, while bad debts have surged to 8% [8][15] - Days-Sales-Outstanding (DSO) is stable, averaging 43 days for machines and 66 days for electronics/ICT, indicating improved credit management efforts [11][13] Looking Ahead - Companies express rising fears about insolvency risks due to the domestic economy's state, with 65% anticipating increased insolvency risk for their customers in the next 12 months [18][30] - Short-term concerns include geopolitical tensions, insufficient production capacity, and operational challenges, particularly in the chemicals sector [20][31] - Long-term worries focus on regulatory compliance and sustainability issues, especially in the chemicals industry [19][21] Survey Findings - A consensus exists that B2B payment practices will change significantly in the next 12 months, with many expecting a positive trend but a growing number anticipating deterioration, particularly in the electronics/ICT sector [24][25] - 51% of companies expect no significant change in DSO, while 32% anticipate improvement [28][26]