The coronavirus pandemic has undoubtedly impacted B2B supplier payment practices as more companies struggle to manage cash flow with shuttered stores and disrupted supply chains.
Some of the markets worst-hit by the pandemic — namely, Italy, Spain and France — have experienced some of the most intense B2B payment delays.
Yet not all organizations are extending payment terms. Indeed, others are shortening them or committing more funds to accounts payable in an effort to support their vendor partner cash flows. At the same time, some regulators have called out larger corporations for using the pandemic as an unnecessary excuse to extend Days Payable Outstanding. PYMNTS rounds up the latest data in late B2B payments below.
Nine rounds of Formula One races have been canceled this year, so to support its racing teams, Formula One has announced accelerated payments. Autosport reported last week that F1 is providing early payments to its teams that rely on its profitability to secure payments in an effort to protect the overall racing system and endure the current economic crisis. "We have advanced money in advance of team payments for certain teams already" said Greg Maffei, F1 owner Liberty Media president and CEO, according to the publication. "... We want to make sure that teams are solvent because they are part of what we need to race successfully in 2020, 2021 and beyond."
30-day B2B payment terms could become the law in Australia, as Small Business & Family Enterprise Ombudsman Kate Carnell calls on regulators to take a stronger stance against delayed B2B payments. She highlighted the surge in delayed payments amid the pandemic, noting that many large firms are "using the COVID-19 outbreak as an excuse for poor payment times."
60-day payment terms are no longer the reality for many UniCredit vendors, the bank announced last week, noting that it will aim to accelerate those supplier payment ties to support partner cash flows. "By anticipating payments, we are adding liquidity to the real economy at a time when it makes a real difference," said co-Chief Operating Officers Ranieri De Marchis and Carlo Vivaldi in a joint statement.
80 percent more B2B invoices are going unpaid in Italy, new data from SideTrade has revealed. Analysis of 26 million B2B invoices worth a collective $58.5 billion in trade has revealed a spike in delayed supplier payments. Unsurprisingly, the European nations hit hardest by the coronavirus are the markets seeing the most dramatic surge in late payments. After Italy, France and Spain have seen the greatest increase in late invoice payments, with jumps of 56 and 52 percent, respectively.
$100 million in supplier payments will be accelerated by L3Harris Technologies, the aerospace and defense technology company announced last week. Targeting small suppliers, the company's faster B2B payments strategy aims to strengthen cash flows for its vendor partners across 45 states in the U.S. In a statement, the firm's CEO and chairman, William M. Brown, said, "Accelerating payments reflects our commitment to support small businesses, the aerospace and defense supply chain, and the vital U.S. defense industrial base."
$457.7 million will be unlocked by Ireland-based fashion retailer Primark for supplier payments, the result of "extensive one-on-one conversations with suppliers, which began four weeks ago and helped us to identify mitigation options, including extended payment terms," the company said, according to WWD reports. The payments will be made for orders that are already in production and were due for delivery by April 17. In addition to unlocking capital for vendor payments, Primark also announced plans to collaborate with its suppliers on financing options.
$2.92 billion-worth of undrawn credit at banks could be key to helping Irish small- to medium-sized businesses (SMBs), Ireland's central bank said last week, warning that delayed and late payments are adding increased pressure on SMB financing demands. One of the biggest factors behind small firms' credit crunch remains missed B2B payments, particularly for suppliers that have already provided goods or services, the Strategic Banking Corporation of Ireland (SBCi) said. The bank's research found as much as $43.3 billion-worth of annual sales among suppliers occur within firms that are at least moderately affected by economic restrictions resulting from the coronavirus.