Abstract
The paper discusses the problem of payment delays in commercial B2B transactions and payment backlogs resulting from them. It also aims at identifying linkages among deferred payments, late payments, and payment backlogs taking account of the scalę of these phe- nomena in Poland, as well as in other countries. Besides, it presents the results of studies on payment delays published in three most important International reports of the following companies: Bisnode D&B, Atradius, Intrum Justitia. The analysis confirmed that a payment delay as such is neutral but it may become negative as a result of the stance taken by an entrepreneur-creditor, who experiences a late payment. Payment delay becomes a negative phenomenon only when the creditor does not approve of such a situation. However, it remains neutral to an entrepreneur who accepts payment delays. Thus, a payment delay is a feature rather than a functional defect of the trade credit market.Since the problem of payment delays and payment backlogs is a pertinent one, it needs to be discussed in specialist literaturę. The paper provides recommendations as to what should be done to reduce the scalę of these negative phenomena.
Highlights
Deferred payment terms are a typical strategy applied to B2B transactions; in the EU Member States almost 50% of B2B trade is covered by deferred payment schemes, which, produces the risk of untimely payment or non-payment, a classic credit risk
Łaszek, when formulating recommen dations with a view to reduce negative effects of late payments and payment backlogs linked with them, we need to bear in mind some vital facts, which are influenced by: 1. market factors; 2. specific reasons for late payments and payment backlogs; 3. companies infecting one another with the late payment “virus” causing a “disease”
M arketfactors: Firstly: late payments are a natural element of a dynamie economy that grows using trade credit as an instrument of transaction financing
Summary
Deferred payment terms are a typical strategy applied to B2B transactions; in the EU Member States almost 50% of B2B trade is covered by deferred payment schemes, which, produces the risk of untimely payment or non-payment, a classic credit risk. The term trade credit is explicitly defined in the subject-matter literaturę and universally accepted as the one meaning the deferral by one party to a commercial transaction (the Seller) o f the payment datę (for the Buyer) fo r goods sold or services provided. Such a scheme is widely used in B2B as well as in B2C transactions being, a much freąuent arrangement in transactions between enterprises (B2B). We may conclude that the relevance of trade credit for business operations of enterprises, on the one hand, combined with multidimensional naturę and importance of conseąuences resulting from credit risk (noncompliance with the original datę of the payment as a result of which it becomes a late payment), on the other hand, make the issue of reliable payment behaviour (business morality) the core aspect that should continuously attract the interest of business researchers and practitioners[16]
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