How B2B businesses can stabilize their cash flow despite declining payment morale.
Germany is experiencing one of the highest inflation rates in the last 40 years. At +10.4 percent, inflation has reached a new high in unified Germany, according to Dr. Georg Thiel, President of the Federal Statistical Office. In particular, the enormous price increases for energy products are responsible for the high inflation, but price increases can also be observed for other goods and services. This change is felt by private households in their daily lives and by more and more B2B companies that are left with unpaid customer invoices.
What does inflation mean?
Inflation refers to the sustained increase in prices of goods and services in an economy. It is caused by a variety of factors and can lead to a decrease in purchasing power. The rate of inflation is usually measured by the Consumer Price Index (CPI), which compares prices of a basket of goods and services from one period to another.
B2B payments are increasingly delayed
The rising prices and the tense economic situation have a direct impact on the payment behavior of B2B customers, as a survey by the credit agency Creditreform revealed. For the first half of 2022, lenders and suppliers reported an average payment delay of 10.5 days. In comparison, the average payment delay of B2B buyers in the previous year was still 9.97 days. According to Patrik-Ludwig Hantzsch, head of economic research at Creditreform, the poor payment record is due to the noteworthy increase in costs, which have significantly impacted companies’ liquidity. SMEs (small and medium-sized enterprises) are particularly affected by this development. For them, the average payment delay is significantly above average at 12.1 days. The annual survey by credit insurer Atradius on payment practices in Germany revealed that half of German chemical, construction and transport companies expect their business customers’ willingness to pay to decline even further in 2023.
“The risk of default has risen
sharply in recent months”
Patrik-Ludwig Hantzsch
Companies in Berlin pay the latest
There are clear regional differences between German states when it comes to payment practices. Berlin tops the list of late payments with 13.4 days, whereas Saxony is well below average at 7.3 days.
Get more out of your payments with Mondu.

Payment morale declines – companies fear for their cash flow
The declining payment behavior of B2B buyers is leading to great uncertainty on the part of retailers. If repayments continue to slow down, this will lead to serious cash flow problems, as analyzed by Atradius Country Director Germany Frank Liebold. The increasing risk of payment defaults and the resulting supply bottlenecks are causing companies to be pessimistic about the future. Only 59 percent of respondents in the Atradius study said they expected their company to grow positively in the next 12 months in view of the negative payment behavior of their customers, compared with 83 percent in the previous year.
Small and medium-sized companies are particularly dependent on punctual payments, as they usually operate with a tight capital base. Payment defaults can even threaten their very existence. But larger companies also fear the consequences of a decline in payment morale. Delaying payments can lead to liquidity bottlenecks, which directly impact the company’s operating business. As a result, the company cannot realize its full potential, as it cannot offer new products or services nor hire additional staff.
A study by Creditreform found that suppliers and lenders have responded by granting shorter payment terms than in the past. At an average of 29.8 days, B2B customers are now being offered the shortest payment terms since 2015.
Do merchants need to choose between customer relations and security?
As invoice amounts continue to rise, the risk of non-payment is likely to increase further in the near future. However, many retailers choose not to shorten payment terms for fear of deteriorating customer relationships.
There are preventative measures B2B merchants can take to protect their liquidity such as conducting a detailed credit check before a purchase on account is approved. This enables the past payment history of potential customers to be checked. Well-managed accounts receivable management also effectively reduces the risk of payment delays and defaults. This requires a dunning system and collection procedure that takes effect in the event of defaults.
There are also other ways to prevent non-payments from damaging the business altogether. Invoices can be sold to a factoring service provider or a payment provider that offers purchase on account, with which merchants are paid the order amount, minus possible fees, by the provider.
Purchase on account without default risk with Mondu’s BNPL solution
Mondu is a payment provider specializing in B2B payments in e-commerce. With Mondu, merchants and marketplaces can offer their buyers invoice and installment purchase solutions with flexible payment terms without having to bear the risk of non-payment themselves. Mondu pays merchants the order amount after invoicing and takes over accounts receivable management, including dunning and collection procedures. With Mondu’s help, SMEs and large companies do not have to worry about the payment morale of their B2B buyers and can concentrate on growing their business.