The time it takes Maltese businesses to get paid has been steadily going down but, at 78.58 days in 2018, it remains considerably longer than the European business-to-business (B2B) average of 34 days.

The Malta Association of Credit Management reported that a year before, Maltese businesses had been waiting 82.30 days. However, it compared this to the European average as reported in Intrum Justitia’s European Payment Index for 2018, which said the countries in its survey had gone down from 37 days in 2017 to 34.

The Late Payment Directive recommends that payment periods for companies to be at most 60 days and for public authorities 30 days.

The Intrum report also said that transactions with the public sector still take longer than B2B ones: 40 days on average, despite the fact that the Late Payment Directive makes 30-day payment terms mandatory.

The European Payment Report is based on a survey conducted across almost 10,000 companies in 29 European countries (excluding Malta) between January and March 2018.

An average of 13% of European outstanding bills are said to be paid late, according to the report. It makes sobering reading as 1.69% of annual revenue had to be written off in the past 12 months (down from 2.14% in 2017 and 2.44% in 2016).

However, in most countries, payment times are shrinking – slowly moving towards the desired 30 days.

Nevertheless, 28% of the Intrum respondents surveyed experience late or missing payments as hindering growth and 21% say that they are unable to hire new staff because their clients fail to pay them on time.

Source: European Payments Report

Companies are reluctant to insist on payments being made on time and also hold back on collecting overdue amounts. Nearly six out of 10 of the companies surveyed say that they were asked to accept longer payment terms than they were able to manage in their daily operations, and more than half (56%) admitted to having accepted these demands.

Only 30% of the European companies surveyed in 2018 say that they hand over their outstanding invoices to a collection agency.