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Payment morality trend: Every tenth invoice overdue

The German Debt Collection Union (BDIU) found that payment morality of young consumers at the age until 24 years hasn’t changed much. The attitude of older target groups, adults (25-59) and has improved slightly. According to the survey conducted amongst almost 600 German collection companies, here are the top five reasons of young people having overdue payments.

In general, the results suggest that the better the financial knowledge, the higher the responsibility to focus on personal finance management avoiding debt overload. Their priorities in spendings differ as they get maturer. Young adults overspend money on short-term consumer wishes, such as online shopping or the gym; more “mature” adults on the other hands rather have liabilities with banks and credit institutions and healthcare spendings for long-term planning.

The surveyed debt collection companies see a positive trend in repayments, thanks to economic and political stability. Apart from consumers liquidity shortage, uncontrolled consumer behaviour and intentional non-compliance are also the main reasons why companies need to wait for their customers to pay. The most affected industries are the consumer-intensive ones:

Companies should strengthen their receivables management to stay away from the risk of liquidity bottlenecks. Not to mention the domino effect of insolvency, which undermines the creditor’s ability to pay their suppliers. Looking at the consumer behaviour of online shopping as one big preference, companies should strengthen their receivables management especially by providing customer-centric digitised automated services, such as provided by collectAI.