B2B payment practices trends, Japan 2024

Stable B2B payment trends hide cash flow risks for Japanese companies

Our survey finds a mixed verdict from companies in Japan about the payment behaviour of their B2B customers during the past year. 33% of businesses report an improvement in payment practices, but many companies in the textile/clothing industry tell us there has been a deterioration. Nearly half of Japanese companies say payment behaviour has remained stable, but although they might see consistent and reliable payments from B2B customers there could still be underlying financial risks affecting their cashflow. The regularity of payments might mask potential problems such as occasional delays or other disruptions that can impact on a company’s liquidity and overall financial stability.

Japanese companies expect a more challenging financial environment ahead

A variety of opinion about the prospects for B2B customer payment behaviour is found among Japanese companies in our survey. 43% of businesses believe there will be no significant change in payment practices during the year ahead but, in contrast, 42% anticipate customers will speed up invoice settlements. 

Only a minority fear any deterioration. There is a similar division on the outlook for Days Sales Outstanding (DSO), with 49% of companies expecting no change and 35% anticipating an improvement in the coming months. The textile/clothing sector foresees some worsening of DSO and the uncertain landscape calls for proactive credit risk management to protect cashflow and financial health.