Italy: insolvencies on the rise, but confidence remains

Introduction

The results of this year's Payment Practices Barometer survey carried out in Italy highlight that 70% of the Italian companies interviewed expect business growth for next year. This outlook echoes a broader economic scenario in which the Italian economy has started grow again and most forecasts envisage a growth of the GDP exceeding 4% in 2022. However, there are still many uncertainties regarding the evolution of the pandemic and its impact on the Italian economic and its business environment. In a similar context, where there are still many uncertainties, it is essential to protect the trade credit portfolio from payment default from B2B customers.

Key takeaways from the report

• Businesses polled across Italy told us that, over the past year, they transacted a significantly lower proportion of their sales to B2B customers on credit. This amounts to 42% of all B2B sales, down from last year’s 55%. Requests for trade credit were most often turned down due to increased costs associated with credit risk management.
• As survey results highlight, late payments involve 56% of the total value of B2B invoices issued by businesses surveyed in Italy. This has remained almost stable compared to last year. Write-offs average 10% of the total value of Italian respondents' B2B invoices, a  rise on last year’s 7%.
• 74% of businesses polled in Italy opted to rely on their own internal resources for their credit risk management this year. This compares to 63% of respondents who told us the same last year. Perhaps as a result of this, the majority of Italian survey respondents also told us they increased the amount of time, costs and resources spent on chasing overdue invoices.
• 3 in 5 survey respondents in Italy reported using a trade credit insurance policy this year. This may be why a vast majority told us they were able to contain levels of DSO (Days Sales Outstanding) this year, with just 26% reporting deterioration and 3% improvement.
• Looking ahead, 70% of the businesses anticipate growth next year and most believe they will see a significant improvement in the domestic economy and slight improvement in international trade over the coming months.
• Although nearly half of the Italian businesses polled expects to continue trading on credit with the same frequency as this year, one quarter told us they plan to extend credit terms as a way of providing short-term finance to their customers in financial distress.
• When asked which pandemic-induced changes will become a feature of the way they do business, 52% of businesses told us that they have permanently adopted the use of digital technologies, particularly in the areas of home working and ecommerce.

Interested in getting to know more?

The Payment Practices Barometer report for Italy gives insights into B2B payment practices and businesses' approach to the management of customer credit risk in the following local industries:

• Agri-food
• Steel/Metals
• Textiles/clothing

For a complete overview, please download the full country report available in the Related documents section below. The Statistical Appendix and regional Payment Practices Barometer survey results are also available free to download.

All content on this page is subject to our Disclaimer, available here.