companies are taking more and more time to pay their suppliers or subcontractors

In its annual report published Thursday, the business mediator points to payment delays which are becoming increasingly significant. They reach almost 13 days in 2023, compared to less than 10 before the Covid period.

Payment times are getting longer. The average is almost 13 days of late payments, alert, Thursday March 21th, the business mediator, a service attached to the Ministry of the Economy. It was less than 10 days before Covid. Legally, businesses have 60 days to pay an invoice, but the majority of them wait this time. With the delays, we arrive at 73 days in the end.

Generally, when businesses delay paying, it’s either because they simply can’t afford it, or they’re being a little tight-fisted and want to avoid overdrafts. It is above all a sign of difficulties, which can materialize in falling orders and increasing expenses. With inflation, the costs of raw materials, energy and wages have increased significantly.

These late payments have negative consequences on the economy. It is a vicious circle, which can weaken the entire production chain. In an economic context that is becoming more difficult, it primarily penalizes the smallest companies which have, by definition, less cash flow.
“When a large customer does not pay on time, it can put a small structure in great difficulty, or even in default”, explains Pierre Pélouzet, the business mediator. These delays also represent one of the primary reasons for tension between companies. So much so that they absorb a quarter of mediation requests between companies.

The government promises to act

The Minister Delegate in charge of Business, Olivia Grégoire, promises to deploy an “arsenal” to tackle bad payers. With some “name and shame”, that is to say the publication of the sanctions in full view of all. The government also promises to “hit the wallet”, by doubling the amount of fines for repeat latecomers, which are currently capped at two million euros. The minister estimates that the amount of this overdue cash in nature represents 15 billion euros. There is an urgent need to act because certain sectors, such as building or construction, are particularly impacted.