EOS Study "European Payment Practices 2025":
Payment morale in Europe continues to decline.

Around 18 billion invoices are issued across the EU every year, but payment morale in Europe is in a bad state: Approximately one in four invoices is paid late (19 percent) or not at all (5 percent). This is shown by the EOS study "European Payment Practices 2025", for which 2,200 financial managers from 11 countries were surveyed.

In Bulgaria payment practice is roughly in line with the European average: 20 percent of payments were made late, and 5 percent of receivables remained unpaid. Compared to other countries, payment morale is highest in Germany, Switzerland, and France. Here, 21 and 22 percent of payments, respectively, were received late or were uncollectible. In Romania, 29 percent of defaulting payers settle their invoices late or not at all. This makes payment morale the worst in a European comparison.

Companies primarily cite short-term liquidity bottlenecks of their private customers (54 percent) and forgetfulness (51 percent) as reasons for late payment or even payment default. In Bulgaria, temporary liquidity shortages rank first with 56 percent, followed by long-term over-indebtedness and personal bankruptcy at 53 percent – the highest level in Europe (41 percent) –, forgetfulness ranks third in Bulgaria (51 percent). 

For business customers, the main reasons cited on average across Europe are payment defaults by their own customers (61 percent) and the exploitation of supplier credits (57 percent). However, slow, non-digitized processing procedures (48 percent) also likely cause delays, according to the respondents. 43 percent see over-indebtedness and insolvencies of their business partners as the cause of unpaid invoices. In Bulgaria, the picture is somewhat different: Here, as many as 72 of respondents cite payment defaults by their own clients as a reason, and 61 percent to the use of supplier credits. In third place, with 56 percent, are slow and non-digitalized processing procedures. This is 8 percentage points higher than the European average. 

Particularly challenging for companies: Some customers apparently do not pay late by mistake. Around a third of companies assume that both business customers (31 percent) and private customers (34 percent) deliberately do not pay their invoices. In Bulgaria, 38 percent suspect deliberate non-payment among their private customers and 36 percent among their business customers.

As a result of poor payment morale, European companies grant their customers less time to settle open invoices. At an average of 31 days, the set payment term is at a low in the ten-year trend (business and private customers). In 2015, it was still 34 days, and in 2022, even 37 days.

Private customers in Europe are granted an average of only 23 days to pay. Only Spanish companies are more generous: they allow a comparatively long period of 31 days. Business customers in Europe have an average payment term of 36 days, thus 13 days longer than private customers. In Bulgaria, the payment term for private customers is 21 days, slightly below the European average. Business customers can expect as many as 38 days – 2 days more than the European average.

Payment delays and defaults are not without consequences: Almost every second company stated that it had suffered profit losses in the past because of this (48 percent), and 46 percent stated that this led to higher interest costs. For every fifth company (22 percent), investments were cut or halted. In France and Slovenia, every fifth company even had to fear for its existence; the European average is 16 percent. In no other European country are the effects of poor payment practices as evident as in Bulgaria: 60 percent of respondents reported a loss of profits, 30 percent said they reduced their investments, and 19 percent stated that they feared for their company’s survival.

Eva Griewel, CFO of the EOS Group: "The longer companies have to wait for their money, the more likely it is that the invoice will not be paid at all. In this respect, payment morale is an important indicator for potential payment defaults. If the number of such defaults increases sharply, it can drive creditor companies themselves into insolvency, with the resulting negative effects such as the loss of numerous jobs."

"Our current study shows that poor payment morale in Europe represents a serious challenge for companies. Although NPL (Non Performing Loans) volumes at banks are currently at a low level overall, we must not underestimate the impact of delayed or outstanding payments. Companies should prepare, because this development places high demands on companies' liquidity management," warns CEO Marwin Ramcke.

The consequences of poor payment morale for creditors can be mitigated with professional receivables management. However, so far only a minority manages their receivables management with external support. Just under a third (30 percent) of companies take a dual approach, handling outstanding payments both internally and through external service providers, in Bulgaria, the figure is slightly higher at 34 percent. On average in Europe, only 7 percent consistently rely on professionals in receivables management. Bulgaria, at 7 percent, is exactly in line with the European average. 

"For creditors worldwide, receivables management is becoming increasingly complex and riskier, also due to the globally uncertain situation," says Marwin Ramcke. In view of their customers' declining payment morale, companies should therefore carefully weigh the economic risks of payment delays and defaults and consider collaborating with a professional debt collection service provider.