B2B payment practice trends, Taiwan 2024

How companies manage B2B payment riskand its impact on cash flow About the Atradius The Atradius Payment Practices Barometer is an annual survey ofbusiness-to-business (B2B) payment practices in markets across theworld. Our survey provides us with the opportunity to hear directly fromcompanies polled about how they are coping with the impact of thecurrent challenging economic and trading environment on thepayment behaviour of their B2B customers. This can give valuable The findings about what measures are undertaken to fund a suddenneed for cash, and what credit management tools they use tomitigate the risk of long-term cash flow problems, may also bevaluable information in helping understand how companies respond However, the survey also has a strong focus on the challenges andrisks that companies polled believe they will encounter during the The results of our survey can supply useful insights into the currentdynamics of corporate payment behaviour in B2B trade, and identifyemerging trends that may shape its future. This can be extremely In this report, you will find the survey results for Taiwan. Interview period: Q3 2024. The findings should therefore be viewedwith this in mind. In this report B2B payment risk managementTaiwan companies shift to more effectivecredit management strategies Disclaimer This publication is provided for information purposes only and is not intended asinvestment advice, legal advice or as a recommendation as to particular transac-tions, investments or strategies to any reader. Readers must make their own inde-pendent decisions, commercial or otherwise, regarding the information provided.While we have made every attempt to ensure that the information contained in thispublication has been obtained from reliable sources, Atradius is not responsible forany errors or omissions, or for the results obtained from the use of this information.All information in this publication is provided ’as is’, with no guarantee of complete- Taiwan B2B payment risk management Taiwan companies shift to more effective Key survey findings ■The vast majority of companies in Taiwan report nosignificant change in B2B customer payment behaviourduring the past year. Four in five businesses tell us paymentpractices remain steady, while the rest are evenly split Late payments remain a significant problem for manybusinesses in Taiwan despite our survey showing relativelysteady payment practices among B2B customers. An average56% of B2B invoices issued in trading on credit are currentlyoverdue, with companies in the electronics/ICT industryespecially affected and some feeling financial strain. There is ■Despite this, late payments continue to be a significant issuefor Taiwanese companies. Currently, an average of 56% ofB2B invoices are overdue, a particular problem in the ■Cashflow issues among B2B customers and delays in thepayment processes are the main reasons cited for overdueinvoices. On average, companies in Taiwan now collectpayment one month after the due date. 43% of businesses, Delays in the customer payment process and B2B customercashflow issues are the main reasons for late payments, andoverdue invoices are now cashed in on average one monthafter the due date. 43% of companies in Taiwan, notably inthe automotive sector, tell us they respond by delayingpayments of bills and/or staff, while businesses in the ■A notable 60% of companies in Taiwan, especially in thechemicals industry, rely on internal funds to bridge potentialliquidity bottlenecks. Supplier credit, bank loans and invoicefinancing are all sources of external funding. 80% of ■Our survey shows that 44% of all B2B sales among Taiwanbusinesses are currently being transacted on credit, with thisstrategy particularly crucial in the chemicals sector. Another long-term approach to optimising working capitalmanagement is a strong focus on improving debt collectionefficiency. 80% of companies in Taiwan say that being able tomitigate large swings of Days Sales Outstanding (DSO) hasbeen a key factor in containing levels of bad debt. The desireto balance safeguarding financial health while pursuing salesgrowth is also evident in our survey. While an average 44% of ■Three in five Taiwan companies tell us they are revising theircredit risk management, shifting from in-house methods to amore strategic approach emphasising the role of creditinsurance. This is especially seen in the electronics/ICT and A clear finding of our survey is that many businesses inTaiwan are switching towards more effective creditmanagement strategies. Three out of five companies,particularly in the automotive and electronics/ICT sectors, tellus they are shifting from in-house retention of credit riskmanagement to a more strategic approach involving the use Taiwan B2B payment practices trends in Taiwan % of B2B invoices paid on time, past due and bad debts B2B payment practices trends in Taiwan % of respondents reporting changes in payment duratio