Payment times for SMEs continue to fall

As in previous years, the report published by the Banque de France's Observatoire des délais de paiement (Payment Delays Observatory) gives an overview of payment times for public-sector buyers and private-sector companies, by sector of activity. In 2022, despite an uncertain economic climate, payment times continued to fall, particularly among SMEs.

Signs of improvement

Encouraging signs point to an improvement in payment times in France, according to the annual report issued by the Observatoire des délais de paiement on June 13, 2023. Despite supply tensions and rising energy prices, payment times have continued to fall. At the end of December 2022, companies were paid with an average delay of 11.7 days, compared with 12.4 days a year earlier. All business sectors are benefiting from this positive trend, although some sectors such as the accommodation and catering and transport-logistics sectors are maintaining higher payment delays of around 16 days.

Another positive sign is the stabilization of the proportion of long delays (over 30 days) at 6% in 2022, compared with just under 7% in the second half of 2021.

These improvements have enabled France to catch up with its European neighbors, with the average late payment in Europe standing at 13 days.

Big groups, bad payers

However, the Observatory notes disparities according to company size. SMEs with between 10 and 199 employees saw a reduction in late payments of just over one day. By contrast, companies with over 1,000 employees saw a rapid deterioration in late payments at the end of the year. Only 40% of them met their legal payment deadlines, compared with 75% of small businesses.

Despite their good performance, SMEs are the last to be paid, which has a significant impact on their cash flow.

" The situation is not satisfactory for SMEs and VSEs. For them, late payment can be lethal ," explains Olivia Grégoire, Minister Delegate for Small and Medium-sized Enterprises, Trade and Tourism.


A stronger "name and shame" policy

To put pressure on major groups, the government has stepped up its "name and shame" policy. In 2022, 238 cases of non-compliance led to administrative fines, compared with 227 in 2021.

What's more, the Banque de France now takes excessive late payment into account in its company rating criteria. As a result, 10% of companies surveyed, including subsidiaries of mid-sized companies and large companies in good financial health, have had their rating downgraded for this reason. The institution has announced that this practice will be extended to subsidiaries of SMEs in 2023.