European companies are once again concerned about difficulties due to delayed payments, and tens of millions of businesses across the continent are at risk of closing, according to the new European Payment Report (EPR) from one of the leading debt management companies on the continent, published this week. The survey was conducted among the management of 10,000 companies from 25 European countries.
The report notes that radical changes following Donald Trump’s election for a second term as President of the United States are exerting new pressure on governments, businesses, and consumers. Another major theme in the study is the effects of the penetration of artificial intelligence, which has already become an essential part of debt management and collection activities.
Concerns about delayed payments in Europe are returning, and if economic conditions do not improve, a total of 10 million European businesses are at risk of closing within two years. Delays in payments pose a significant risk of business closures because they reduce liquidity and limit the ability of small and medium-sized enterprises to grow. Each year, 11% of receivables are paid with delays, according to the report.
At the same time, there are indications that managers plan to increase the use of external partners for debt collection. Currently, outsourcing accounts for an average of 28% of late payments, but over the next two years, this share is expected to rise to 32%. A total of 56 percent of managers say they have accepted unfavorable payment terms to maintain their commercial relationships—up from 49% in 2021. Nearly half of those surveyed have agreed to longer payment terms to prevent a client’s bankruptcy, which is a 9 percentage point increase compared to the last year.
A total of 23% of managers fear that they may have to cease operations within the next two years if there is no improvement in economic conditions. However, the results vary depending on the type of company—for small and medium-sized enterprises, this share is 29%, while only 11% of large corporations are pessimistic. If these concerns materialize, it would put 40 million jobs in Europe at risk, weakening internal demand and undermining the social and economic stability of the continent, experts warn.
According to the survey, 58% of company managers believe that artificial intelligence (AI) will significantly improve the management of delayed payments this year—an increase of 8 percentage points compared to 2024. On this front, it turns out that few companies apply AI in their customer relationships, which is negligible compared to younger customers who prefer to communicate with AI assistants when facing payment issues.
AI is used by 59% of managers for managing delayed payments, with 25% citing increased efficiency as the main advantage. Twenty percent believe that technology helps them reduce delayed payments, while 15% use it for analysis. An equal number of companies achieve higher consumer engagement through AI. Interestingly, the most people prefer communication with AI chatbots when discussing delayed payments—a total of 31%. The least willing to communicate with bots are in Croatia—only 16% want an AI bot for conversation.
Inflation also weighs heavily on European companies, although it has fallen from 10.6% annually in 2022 to 2.8% annually last year. Expectations are that price growth will exceed the target of 2% set by the ECB, and geopolitical tensions will exacerbate it. According to the survey, increasing fiscal spending, particularly on defense, could help economies recover from industrial stagnation, but this will not happen immediately. In the near future, the result will likely be inflation and higher borrowing costs, so the risk of stagflation for Europe is growing. Stagflation is an economic phenomenon where inflation combines with a decline in economic activity.
Nevertheless, European companies reported many positive developments last year—72% noted sales and revenues above or at least equal to expectations. Additionally, for 57%, last year brought more innovation implementation than expected, and 71% had gross profits at least as much as forecasted or even more.
