In the 1963 Greek film The Lazy Dog, the protagonist Dimitris Papamichail, when he finally decides to leave his bed and work, succeeds as a debt collector on behalf of the company. In order to collect late payments he does not hesitate to sue debtors, resulting in one day in prison. Today, companies – and we don’t mean “collection” cases that provide “protection” of stores – do not use such means. However, what is happening may be due to the successive crises that have befallen him. European economy lately spend time and money collecting overdue debts.

They are worth 275 billion euros

According to a pan-European study by claims management company Intrum, chasing delinquent debts is valued at 275 billion euros, more than Finland’s GDP, and the time spent chasing them is estimated at a total of 74 days a year or 29% of work time. .

Costs for a medium-sized business in Europe, mainly administrative costs related to the people that need to be allocated and the working time needed to debt collection, is estimated at 9,194 euros per year. The Intrum survey was conducted in 29 European countries, including Greece, in 10,556 small, medium and large companies between November 2022 and March 2023.

OUR Hellas, because according to research, it is one of the five countries where it takes the most time to “hunt” for debtors. Specifically, Finland is in the first place, where 51% of enterprises spend more than 10 hours a week trying to collect overdue debts. They are followed by France, where 49% of enterprises are in the same position, Poland (47% of enterprises), as well as Germany and Greece, where 46% of enterprises are forced to spend more than 10 hours a week “hunting” for debt. In fact, 5% must spend more than 20 hours a week on this process.

According to a pan-European survey, Greece is among the top five countries where debt collection takes the longest.

In accordance with European Payments Report 2022 Intrum (this year’s equivalent will be published on May 23), the average actual payment time of enterprises to other enterprises was 50 days, and the state to enterprises 62 days, which is 13 days more than the average time agreed between the two parties. It is worth noting that 2019, the last year before its appearance COVID-19the average real time of payment between enterprises in Greece was 64 days (average for Europe 40 days). government payments for businesses 115 days (European average 42 days).

As you might expect, the sector that spends most of its time collecting debts, the time it takes to send reminders to debtors, and issue payment orders and go to court is the financial sector, mostly banks. 45% of enterprises in this industry spend more than 10 hours a week on this process. In second place (44%) is the mining sector and in third place with 44% is the public sector, apparently to collect mainly taxes and insurance premiums.

Nearly 58% of European businesses take legal action to file claims, and 34% of businesses have internal debt collection procedures. According to Intrum’s latest available data from a 2019 report, 4.1% of Greece’s debt has been written off (third place among the 25 countries surveyed).

On the other hand, there are companies that choose mediation and generally softer ways to claim their money, which, on the one hand, can help improve relations with their clients, and on the other hand, according to Intrum, the cost of a long debt collection process is higher.

Waste of resources

“Delinquent debts have always been a concern for businesses. However, what was once only an afterthought has now become a top priority for corporate governance. Many businesses recognize that the resources they spend chasing bad debt could be spent on growth, investment in digital transformation and innovation, hiring and retraining, and geographic expansion, which just doesn’t work in the short term. It’s possible.” said Andres Rubio, President and CEO of Intrum.