Survey on "Ways of dealing with the crisis in microentreprises"
Payment backlogs are often presented as a brake on the economy, a factor that hinders its development. But do all companies struggle with this problem? An analysis conducted by The Citi Handlowy Leopold Kronenberg Foundation in cooperation with the Microfinance Centre and TNS Polska clearly shows that as many as 79% of firms have not experienced payment backlogs.
Poland is in last place in Europe when it comes to payment backlogs. But at the same time, the news from the domestic market is not very optimistic: according to a survey by the National Debt Register and the Conference of Financial Companies, 91% of companies in the commercial sector have a problem with recovery of receivables. So why is it that we see nearly the opposite situation among microentreprises?
There are several reasons why micoetreprises declare a lack of payment backlogs. First of all, these are usually companies that cooperate with regular, tried-and-true contractors, often family members or friends. In such situations, putting off payment of debts not only poses the threat of material consequences, but also stigmatizes the non-paying firm in the local community. Usually micoetreprises do not work with large corporations, who are in the habit of delaying payments, often for indefinite periods. Moreover, in case of microenterprises, the invoiced amounts are usually not so high that paying bills is a problem for their contractors, explains Tomasz Pol, Director of Product Management at Citi Handlow, Of course, this is not the case for all microentreprises, he adds.
Companies that do experience payment backlogs in their business activities state that the main reasons for this are: delays in settling invoices (39%), falls in turnover/profits/orders (20%) and financial difficulties of their firms.In the words of the entrepreneurs themselves, this situation is primarily the result of (sample quotes from the survey):
- "Poverty in the country, the decreasing wealth of society",
- "Customers don't pay on time, they keep delaying, pay only partially, and so money ends up disappearing",
- "Rent increases and prior commitments that drag on month after month".
However, what is most disturbing is that as many as 33% of firms are not familiar with remedial methods regarding payment backlogs (especially the most sophisticated ones, e.g. government guarantees). Most often, lack of knowledge of such solutions is characteristic of microenreprises consisting of just the owner and one employee (39%) as well as service companies. The best known remedial methods among the surveyed owners of microenterprises were the services of debt collection companies, negotiations, assistance of a court or bailiff, and the possibility of insuring debts. However, such actions are rarely taken - 85% of microenreprises don't make use of any of these solutions, and those used are based mainly on negotiations.
