According to her European Intrum Payments ReportAmong the factors hindering company investment in strategic growth initiatives, are Customers pay late (39%) and lose bad debts (18%).

Similarly, one of the two Spanish organizations considers that the widening gap between payment terms and their realization is a real risk to their development. These difficulties will change the roadmap set by the company, where their business growth is a top priority 6 out of 10 companies.

According to the National Institute of Statistics, 26,207 Spanish companies announced their closure in 2022, 10% more than the previous year and the highest number since this data was recorded. Information indicating that 2022 will not be an easy period for the national business ecosystem thereby limiting company investment in its growth strategy. A trend shared by Intrum’s European Payments Report, from which it can be concluded that, in the past year, only 35% of Spanish companies were able to order additional funds to achieve their growth plans. This figure places entities in our country four points below the European average (39%).

In particular, among the 29 European countries analyzed by credit and asset management services companies, Spanish companies will occupy the seventh position from the bottom, under German (44%), French (42%) and English (38%), and they will be at the same level as Portugal (35%). The entities that reserved the most additional funds were Ireland (48%), Sweden (48%) and Hungary (47%), while the other extremes were Bosnia and Herzegovina (29%), Lithuania (29%) and Croatia (26%) , as the European countries whose organizations are the least likely to receive the funds.

What factors limit business growth?

Late payments and uncollected debts, in this case, are one of the main causes of not being able to invest sufficiently for business growth. The report developed by Intrum highlights that 39% of Spanish companies admit that their investments in strategic growth initiatives are affected by late payments from customers, and 18% refer for bad debt losses as another reason not to move forward in this direction.

In fact, as they admit, the widening gap between payment conditions and their settlement will be a real risk to the growth of 49% of Spanish companies, the same percentage as the European average (50%).

These figures show that effective billing and payment management is a fundamental requirement for a growing business network. If the entity does not receive payments from its clients on time, the entity will not have sufficient resources to generate more work, investing in innovation or developing efficiency and competitiveness, and, in the medium term, will also be unable to meet its financial obligations, leaving its suppliers and creditors to also end up in a similar situation.

On the other hand, the current socio-political context also influences business development. In this case, the latest edition of ‘Survey of Spanish companies on the evolution of their activities’ The Bank of Spain -corresponding to the fourth quarter of 2022-, will reveal some of the causes that can limit the growth of companies: 81% of organizations are negatively affected by high costs of energy inputs, while 45% are affected by supply difficulties related to the conflict in Ukraine. According to the same study, other factors hindering business development are labor shortages (45%) and difficulty receiving supplies from regular suppliers (31%).

All these difficulties will change the roadmap set by the company, in which business development plays a fundamental role. In fact, as Intrum has shown in its European Payments Report, growing your business is the top priority for 61% of companies in our country. A fact that places Spain as a third country
Europe whose organizations have business growth as a priority, is only below the Dutch (71%) and Swiss (71%) entities.