Western Europe’s late-payment reality: what it means for your cash

What the numbers are telling you

Across Western Europe, companies report a tougher payment landscape. Nearly half of B2B invoices are overdue, and bad debts are rising. Many teams say customer liquidity is the main cause. That pressure turns routine AR into a source of risk for margin and growth.

Why this matters to you: slower collection ties up cash and forces trade-offs on hiring, inventory, and growth. Your job is to shorten time to collect without hurting relationships.

The lever that moves DSO

Our whitepaper, The Seven Pillars for Unlocking Cash Flow, shows how modern AR teams win by combining three ideas. First, automate routine order to cash work so people focus on exceptions. Second, personalize reminders so customers see a clear next step. Third, put risk signals inside the workflow so limits and actions are obvious. Together these levers free cash, reduce effort, and cut write-offs.

Western Europe by the numbers

• Overdues match on-time. On-time and overdue each account for about forty seven percent of invoice value. Bad debts average six percent. Liquidity stress is the top driver of delay, followed by operational constraints and invoice disputes.

• Terms hold steady. Most companies keep 31–60 day terms; more extended than shortened to support customers. Many rely on external financing and supplier credit to bridge gaps.

• Risk edges higher. Nearly half expect more customer insolvencies, even as DSO is expected to stay flat. Signals on inventory and DPO are mixed.

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Turning days into cash

Average AR = (DSO × Annual Credit Sales) ÷ 365
At 10 million in annual credit sales and 45 days DSO, about 1.23 million sits in receivables. At a six percent cost of capital, that’s ~73 thousand a year to carry. Every five extra days adds ~eight thousand. Small delays matter.

Moves that release cash now

Make reminders effortless to act on

Keep copy short, respectful, and specific. State the invoice, amount, and due date up front. Offer one action: pay, propose a plan, or flag a dispute.

Recover soft declines instead of writing them off

Retry at better hours and, where possible, on alternative rails. Recovery improves when timing and route match the customer.

Let risk steer the work

Blend how each customer pays you with external ratings (e.g., Dun & Bradstreet via Altares). Show both on the debtor record so policy becomes clicks: who to contact, when to escalate, whether to adjust exposure.

Cut handoffs to keep momentum

Generate batches each morning, route disputes, and turn promises into timed tasks that pause escalation until the promise date—then resume automatically if it breaks.

Scale the wins with AI

Use AI to personalize content, pick the next best channel and time, and summarize long threads so agents act faster. Keep guardrails so tone stays clear, compliant, and on brand.

How buyers are playing it

Your customers are protecting liquidity too. Many extended terms to support relationships, yet overdue levels remain high and bad debts are rising. Expect mixed signals on inventory and supplier pressure on DPO—design AR to respond quickly.

Build this into your stack

• One screen showing internal behavior beside external ratings.

• Journeys with clear steps and timing aligned to risk.

• Promises to pay that drive follow-up automatically.

• Clean exports for collections with full history.

• Reporting on promise rate, kept-promise rate, time to collect after first reminder, responses per step, and escalations avoided.

Questions leaders ask

How often should ratings refresh?
Follow your provider’s cadence so risk signals stay current.

Where should scores live?
On the debtor record, in call lists, and inside journeys, not in spreadsheets.

What tone works best?
Clear, respectful, simple. One action per note. Offer help for disputes.

How do we show the cost of delay?
Use the Average AR formula with your revenue and DSO to translate days into cash and carrying cost.

What should change first?
Shorten templates, automate cadence, add smart retries, then embed behavior + external ratings in daily work.

Are you using AI to personalize your dunning letters and timing?
See how the seven pillars link personalization, next-best action, and AR workflows. Read our online whitepaper The Seven Pillars for Unlocking Cash Flow today.