\n<\/p>\n
\n Over half of businesses also report an increase in administrative costs associated with management of accounts receivable, mainly on assessing and monitoring customer credit risk. <\/p>\n
HONG KONG
\u00a0<\/p>\n
Over
\u00a0<\/p>\n
The survey also
\u00a0<\/p>\n
Looking
\u00a0<\/p>\n
Respondents
\u00a0<\/p>\n
“The optimism among
\u00a0<\/p>\n
Atradius
Download
\nSAR –\u00a0Media OutReach<\/a>\u00a0–\u00a016 June 2021 –\u00a0<\/b>According to the results of
\nthe latest “Payment Practices Barometer” survey conducted in Asia by Atradius<\/a>, 60%
\nof the B2B invoices on credit in the United Arab Emirates (UAE) were not
\nsettled on time, which is significantly higher than the 50% average for Asia as
\na whole. On average, it took businesses 40 days to collect payment from overdue
\ninvoices. More importantly, 8% of the B2B invoices in the UAE were write-offs,
\nup considerably from 1% in last year’s survey results. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nhalf (52%) of businesses also reported an increase in administrative costs
\nassociated with the management of accounts receivable, mostly spent on
\nmaintaining a credit department dedicated to assessing and monitoring customer
\ncredit risk. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nrevealed that the value of sales through open credit in the UAE dropped
\nyear-on-year, from 64% to 50%, which may reflect a contraction in sales amid
\nthe pandemic. However, more businesses polled in the UAE (37%) than in other
\nmarkets across Asia (26%) increased the frequency of using open credit.
\nEncouraging repeat business and winning new customers are the two most common
\nreasons for the use of open credit, highlighting the pivotal role that this
\npractice plays in enabling trade. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nahead, compared with Asia (37%) overall, far more businesses polled in the UAE
\n(53%) believe that their Days Sales Outstanding (DSO), the average number of
\ndays to collect payment for credit sales, will deteriorate over the coming
\nmonths. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nindicated that the greatest challenges to business profitability in 2021 will
\nbe maintaining adequate cash flow (29%), followed by falling demand for
\nproducts and services (20%) and the containment of costs (16%). Despite these
\nconcerns, half of businesses surveyed in the UAE are optimistic about an
\nimprovement in their business performance over the next 12 months. Twice as
\nmany respondents in the UAE (32%) as in Asia (15%) believe this anticipated
\nimprovement will be mainly due to increased exports, which may reflect the UAE
\nbeing one of the world’s most dynamic markets in export trade. <\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nsurveyed UAE businesses on their performance may reflect future opportunities
\nin the UAE’s credit sale market, as the economy is supported by one of the world’s
\nhighest COVID-19 vaccination rates as of late May. However, expectations of a
\nrapid rebound may be fragile amid valid concerns about challenges to business
\nprofitability. Under these circumstances, businesses in the UAE should assess
\nhow to strengthen their credit management processes to be more comprehensive
\nand efficient. In particular, businesses should frequently adjust payment terms
\nto reflect varying credit risk profiles and ensure effective invoice
\ncollection,” said Schuyler D’Souza, Managing Director Middle East at Atradius.<\/p>\n
\n
<\/p>\n
\n
<\/p>\n
\nconducted the survey in the second quarter of 2021, collecting responses from
\n1,200 businesses across Asian markets including the UAE, China, Hong Kong,
\nIndonesia, Singapore and Taiwan. <\/p>\n
\n
\n
\n
<\/p>\n
\nthe full report here: https:\/\/atradius.com.hk\/en\/publications\/payment-practices-barometer-uae-2021-dso-upward-trend-worries-businesses.html<\/a><\/p>\n