What 20 years of payment data tell us about credit risk

Every day, millions of businesses make decisions about whether to grant credit, extend payment terms, or pay suppliers on time. Individually, these decisions may seem routine. Collectively, they provide one of the clearest signals of how businesses are coping with economic pressure.

For 20 years, Atradius has been tracking these signals through the Atradius Payment Practices Barometer (PPB), one of the largest international studies of B2B payment behavior. The latest findings, shared at ICISA Credit & Surety Week 2026, reveal how businesses are navigating a period marked by persistent economic uncertainty, payment pressure, and elevated insolvency risk.

As Silvia Ungaro, Senior Advisor on B2B Payment Trends at Atradius and lead researcher behind the study, explains: “The Payment Practices Barometer gives us a snapshot of payment performance and helps identify how economic pressure moves through the economy and translates into payment risk.”

Covering 35 markets across Western Europe, Central and Eastern Europe, Asia, North America, and Australia, the survey tracks four key indicators of payment risk: payment terms, overdue invoices, receivables ageing, and bad debt. Together, they provide a unique view of how economic pressure affects businesses, moves through supply chains, and eventually translates into credit risk. Combined with businesses’ expectations for the months ahead, the research offers insight not only into current market conditions but also into emerging risks.

Why payment behavior matters

Trade credit remains one of the most important sources of business financing in the world economy. According to the 2026 PPB, an average of 46% of B2B sales are made on credit across the markets surveyed.

Silvia Ungaro highlights the scale of the role trade credit plays in the economy: “This means suppliers finance almost one in every two euros traded between businesses. Trade credit is therefore an essential source of business finance, as well as a major source of credit risk. By granting trade credit, the supplier is effectively providing short-term financing to the customer. A substantial share of business activity depends on suppliers' willingness and ability to carry credit risk. This creates significant exposure for businesses and helps explain why payment trends deserve close attention. When nearly half of B2B trade is supported by supplier financing, changes in the speed and reliability of payment can highlight shifts in business liquidity before they become visible in traditional insolvency indicators”.

Overdue invoices and liquidity pressure

The survey has consistently shown that a significant proportion of invoices are not paid on time. According to the 2026 PPB, an average of 24% of invoices across the surveyed markets were overdue.

An overdue invoice is not necessarily a bad debt. Most overdue invoices are eventually collected, and a short delay doesn't automatically indicate that a customer is approaching default. However, it does mean that expected cash has not arrived when anticipated.

As Silvia Ungaro notes: “Effectively, around one invoice in every four has passed its payment date. The economic effect is clear. Cash remains tied up in receivables, working capital requirements increase, and cash-flow forecasting becomes less reliable. Businesses may need to draw on internal reserves or external financing to bridge the gap, particularly when access to finance is constrained by tighter financial conditions. For larger, well-capitalized companies, this pressure may be manageable. For smaller suppliers with limited access to finance and narrower margins, repeated delays can be more consequential and cause greater damage.”

The key question, however, is not simply whether an invoice is overdue, but what lies behind the delay. Is it an isolated case or part of a recurring pattern? Are payment delays becoming longer? Are they concentrated in specific sectors or customer groups? Are customers requesting revised payment terms? And are the causes operational, commercial, or financial?

Answering these questions helps businesses distinguish between temporary payment friction and the early signs of more serious financial stress. While overdue invoices do not necessarily predict future losses, their level and direction can provide an early warning that liquidity conditions are beginning to weaken.

What drives payment delays?

One of the most important findings of the study is that not all payment delays signal the same level of risk.

As Silvia Ungaro points out, some delays stem from operational or administrative issues, such as invoice-processing errors, paperwork problems, or internal approval bottlenecks. While these issues can slow collections and create payment friction, they don't necessarily indicate that a customer is experiencing financial difficulties.

Commercial disputes are another common cause of late payment. Disagreements over pricing, product quality, deliveries, or contractual obligations may delay settlement, but they are not always a sign of deteriorating credit quality.

“Customer cash-flow issues, however, deserve particular attention. While they don't automatically mean that a business is in financial distress, they can signal growing pressure on liquidity and financial resources. According to the PPB findings, these concerns are among the reasons most frequently mentioned by businesses when explaining payment delays,” notes the lead researcher behind the PPB.

Understanding the difference matters. Late payment on its own provides only part of the picture. The underlying cause often determines whether a delay represents temporary operational friction, or an early sign of broader financial stress. Looking beyond the payment itself helps businesses identify where pressure is building and assess emerging risks more accurately across their supply chains.

From late payment to bad debt

The financial consequences of payment pressure become fully visible when delays turn into permanent losses, directly affecting profit, cash flow, and investment capacity. The findings show that businesses are writing off between 1.8% and 2.6% of receivables, depending on the market.

As Silvia Ungaro points out: “These may appear to be modest figures, but they're significant. They mark the point at which a payment delay stops being a working-capital issue and becomes a direct financial loss. The results indicate deterioration in most regions, with North America as the exception.”

Bad debt represents the final stage of the payment risk cycle. By the time a receivable is written off, the warning signs have often been visible for some time through rising overdue invoices, longer payment delays, and increasing pressure on customer liquidity.

When businesses can't convert receivables into cash as expected, the consequences can quickly spread across the organization. According to the research, these effects are remarkably consistent across regions. Reduced liquidity, higher financing needs, and growing pressure on working capital can force companies to draw on credit facilities, increase borrowing, or seek alternative sources of funding. As a result, investment plans may be postponed, expansion delayed, and growth opportunities missed.

Business expectations for insolvencies

Looking ahead, across all regions surveyed, the dominant view is that insolvency levels will either remain elevated or continue to rise.

According to Silvia Ungaro: “North America provides perhaps the clearest example, with a large majority of companies expecting insolvencies to remain elevated. In Asia, sentiment is more evenly divided between those expecting insolvencies to stabilize and those anticipating a further increase. The picture is similar in Central and Eastern Europe, although expectations are somewhat more pessimistic. Western Europe appears more stable, with the majority view that current conditions will persist.”

These expectations align with other risk indicators identified in the survey. Businesses continue to express concerns about slower economic growth, persistent inflationary pressures, weaker margins, rising working-capital requirements, and geopolitical uncertainty. Taken together, these trends point to a challenging business environment in the short term.

As she argues: “Businesses shouldn't monitor payment behavior separately from the wider economic and financial environment. This is the central message of the PPB. Vigilance therefore remains essential. Few businesses appear ready to assume that the insolvency cycle has turned. The survey suggests that companies are preparing to withstand continued financial pressure rather than expecting a rapid return to more comfortable trading conditions.”

The Atradius research reinforces an important lesson from two decades of market observation: payment behavior remains one of the earliest and most revealing indicators of developing stress in customer finances. While important regional differences remain, businesses across the world continue to operate in an environment characterized by economic pressure, elevated payment risk, and persistent uncertainty. The latest results suggest that these conditions are unlikely to ease significantly in the near term. Companies that successfully transform market intelligence into practical mitigation measures are likely to be better equipped to navigate today's demanding trading environment.

To explore how to strengthen your own credit risk strategy, get in touch with us and see how we can help you stay ahead.