B2B payment practices trend, India 2023

The 2023 Payment Practices Barometer survey for India was conducted between the end of Q2 and the beginning of Q3 2023, and findings should therefore be viewed with this in mind.

Key takeaways from the report for India

Relaxed payment terms worsen Days-Sales-Outstanding (DSO)

• Our survey found that the more relaxed trade credit policy introduced by Indian businesses had a negative impact on Day-Sales-Outstanding (DSO). 46% of companies polled said DSO either deteriorated during the past year or showed no alteration from an already high level. The consequent pressure on cashflow prompted a range of risk mitigation measures.
   
• Many companies dedicated more time and resources to chasing unpaid invoices, while 55% of businesses polled said they delayed payments to their own B2B suppliers to maintain liquidity, a popular strategy in the consumer durables sector. Seeking short-term finance was another tactic, either through bank loans or requesting trade credit from suppliers.

Widespread concerns over inflation and climate change impact

• Optimism about prospects for the year ahead were clearly evident among companies polled across India. A remarkable 83% of businesses said they expect demand for their products and services to increase, a positive mood found in all sectors. The only note of caution came from some companies in the chemicals sector, perhaps reflecting concern about the impact of domestic and global headwinds on India’s economy later in the year. 62% of businesses anticipate an increase in profit margins during the coming months, although pessimism was expressed in the consumer durables sector due to worries about cost pressures.
   
• Our survey found that 63% of companies polled across India believe their Days-Sales-Outstanding (DSO) will improve during the year ahead. This optimism was particularly reported in the chemicals, showcasing a proactive and forward-thinking approach to strategic credit management as they try to strike a balance between control and risk transfer.

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers. 

Interested in finding out more?

For a complete overview of the 2023 survey results for India, please download the full report available in the related documents section below. The Statistical Appendix to the regional report is also available for download in the section below.

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