Hungary: improving payment practice reflect upbeat mood

Introduction

Despite the overall improvement in payments behaviour emerging from survey data in Hungary, where payment delays from B2B customers were incurred, many businesses polled in the country responded by refusing new credit requests. A reflection of this is in the small drop in the overall proportion of credit B2B sales made by businesses in Hungary this year compared to last year (48% versus 51%). Looking into 2022, the vast majority of the businesses we spoke to in Hungary expressed optimism and predicted growth in 2022. Most believed customer payment practices will improve and told us they will continue to offer credit as often as they did last year. However, downside risks to this positive outlook remain, as a sizeable number of businesses expressed concerns over the health of the domestic economy over the coming months.

Key takeaways from the report

• Businesses polled across Hungary told us that they most often offered credit in a bid to win new customers in a competitive market.
• On the whole, businesses were successful in managing trade credit, as the total value of overdue B2B sales in Hungary dropped to 34% from last year’s 46%. Reportedly, this year an average of 2% of all B2B invoices were written off as uncollectable.
• Interstingly, 46% of the Hungarian businesses pollled reported a deterioration in DSO over the past year.
• Looking into 2022, nearly half of the businesses polled in Hungary are worried that ongoing uncertainty over the continuation of the pandemic would trigger an increase
  in insolvencies and a deterioration of corporate payment practices.
• Perhaps prompted by these concerns, many businesses told us they plan to take further steps to protect their accounts receivable next year, either through a more proactive
  approach to credit management in-house or by taking out a credit insurance policy.
• When asked which pandemic-induced changes will become a permanent feature of the way they do business, 48% of businesses told us that they have permanently adopted home working. Many have introduced increased digitalisation in their business operations, and a significant number believe changes in customer demand and supply chains will be
  long-lasting.

Interested in getting to know more?

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

• Agri-food
• Consumer durables
• Steel/Metals

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.

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