Late payments weaken businesses, especially SMEs, by limiting their cash flow and growth. The sectors affected are numerous: construction, real estate, services.
When we talk about business bankruptcies, we instinctively think of visible causes: poor management, drop in sales or economic crisis. But a more discreet, and equally destructive, threat persists: late payments. In 2024, this phenomenon, often minimized, has reached an alarming level in France. How do these delays affect our businesses, and above all, what can we do about it? Let’s dive (oops, observe) this delicate subject together.
A worrying trend: payment delays on the rise
In France, the average time to pay invoices increased to 12.9 days in 2024, compared to 11.7 days in 2022. A difference that seems negligible, but which has very real repercussions. In real estate, for example, delays average 27 days. Imagine the pressure on developers’ cash flow already strangled by construction costs and rising interest rates.
And it’s not better elsewhere. With an average delay of 51 days, France lags behind Germany (43 days) and Spain (47 days). A bad habit that particularly penalizes small and medium-sized businesses (SMEs) and very small businesses (VSEs), often lacking safety nets.
Sectors on the front line
Some sectors are clearly more affected than others. Let’s take a moment to look at the most affected:
• Real estate : real estate developers are bearing the brunt of rising costs and prolonged delays. Result ? A cascade of financial tensions.
• Construction : in 2024, insolvencies jumped by 36%. Many small masonry or siding companies are struggling to keep up.
• Business services: advice, logistics or security, these activities often depend on large clients, and when the latter delay their payments, the impact is direct.
Cash flow: the crux of the matter
Late payments don’t just slow down financial flows. They can literally break a business. A tight cash flow means a constant race to pay salaries, rent or repay loans. Companies end up looking for expensive solutions:
• Factoring: convenient for quickly releasing funds, but it eats into your margins.
• Credits: useful, but the interest adds to the bill.
And that’s not all. When a company falls behind in paying its own suppliers, business relationships deteriorate. You may have already seen this vicious cycle: financial penalties, breach of contracts and a reputation that takes a hit.
Why do these delays persist?
It’s not just about money. It is also a story of behavior. Here are the main reasons:
1. Major contractors dictate their rules: they take advantage of their dominant position to impose excessive delays.
2. Laws poorly enforced: in theory, the legal deadlines are strict (45 or 60 days max). In practice, sanctions are rare.
3. A culture of tolerance: delays are almost accepted as a norm. Many companies hesitate to claim their dues for fear of offending a customer.
Solutions? Yes, but no instant miracle
So, what can we do to limit the damage? Companies can already adopt simple and effective strategies:
• Rigorous monitoring of receivables: use digital tools to monitor your payments and automate reminders.
• Solid contractual clauses: include late payment penalties in your contracts.
• Anticipate risks: ask for deposits or check customers’ creditworthiness before signing.
• External solutions: credit insurance or factoring, if you can afford the cost.
Public authorities also have their role to play: intensify controls, strengthen sanctions and promote platforms to streamline payments. Will this be enough? Not without a deeper cultural shift.
And now ?
Late payments aren’t just a matter of a few extra days. This is a serious threat to the survival of businesses, and by extension, to the French economy. This problem, as complex as it is, can be mitigated with a combination of actions: digitalization, rigorous management and a strengthened legal framework. But it will take time, will and a collective effort to break this vicious spiral.
So, the next time you send an invoice or wait for payment, ask yourself: what is this delay really costing?
