Bad debts cast a pall over Singapore's business-to-business payment scene

Invoices are usually 40 days overdue.

Over the past year, businesses in Singapore extended trade credit to their B2B customers and experienced higher frequency in late payments of B2B invoices, according to a survey by Atradius.

The survey showed that 94% of respondents in Singapore experienced late payment of B2B invoices, as compared to 90.2% in the region. 

The average domestic payment delay figures also rose to 40 days this year, among the highest in the region. 

According to the survey, among the factors that affect payment delay include liquidity issues and complexity of payment procedures.

Almost half of 48.2% of respondents in Singapore said that late payments from domestic B2B customers were most often due to liquidity issues, while late payments from B2B customers abroad was mostly attributed to complexity of payment procedure.

“These late-paying B2B customers often default, with the consequence that their receivables are unlikely to be collected and written off as bad debts. As such, the potential exposure to trade credit risk of businesses in Singapore is higher than average for the region,” the survey said.