Italian B2B firms face rising liquidity risks and payment delays
Atradius reports that Italian companies are struggling with increased B2B payment delays, impacting liquidity and profit margins amid a subdued economic environment.
Italian businesses are reporting significant liquidity stress as B2B payment practices deteriorate across the country. According to a new report from Atradius, approximately two-thirds of B2B sales in Italy are conducted on credit, a figure that significantly exceeds the Western European average. This reliance on trade credit, coupled with tightening bank financing, has heightened exposure to customer payment risk.
Payment terms in Italy remain slower than the regional norm. Only 40% of firms utilize a 30-day credit window, and once an invoice becomes past due, the settlement period typically extends well beyond European benchmarks. These delays are largely attributed to cash flow constraints within the supply chain, which directly reduce the available working capital for Italian firms.
Financial performance is also under pressure, with a higher share of Italian companies reporting bad debts in the 5% to 10% range compared to their regional peers. Looking ahead, sentiment remains cautious. Most businesses do not anticipate a short-term improvement in payment timings, and the expectation for insolvency levels remains high as input costs and financing conditions continue to limit growth.