Insights from FCIB Credit & Collections Survey - July 2024
The FCIB Credit & Collections Survey conducted in July 2024 provides valuable information on sales distribution, payment terms, average delays, and trends in credit management across India, Russia, Ukraine, and Venezuela. The survey explores customer types, payment terms granted, average days beyond terms, and the status of payment delays in different countries.
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July 2024 FCIB Credit & Collections Survey India, Russia, Ukraine, Venezuela
Are your sales primarily to new or existing customers? 100% Venezuela 0% 100% Ukraine 0% 100% Russia 0% 83% India 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% India 83% 17% Russia 100% 0% Ukraine 100% 0% Venezuela 100% 0% Exisiting New Exisiting New FCIB Credit & Collections Survey July 2024
On average, what payment terms are you granting? India Russia 45% 60% 42% 40% 50% 50% 50% 35% 40% 30% 25% 25% 25% 30% 20% 20% 15% 8% 10% 10% 5% 0% 0% 0% 0% 0% 0% We do not extend credit in this country 1-30 31-60 61-90 90+ We do not extend credit in this country 1-30 31-60 61-90 90+ FCIB Credit & Collections Survey July 2024
On average, what payment terms are you granting? Ukraine Venezuela 45% 60% 42% 40% 50% 50% 35% 29% 29% 30% 40% 25% 30% 25% 20% 15% 20% 13% 13% 10% 10% 5% 0% 0% 0% 0% 0% We do not extend credit in this country 1-30 31-60 61-90 90+ We do not extend credit in this country 1-30 31-60 61-90 90+ FCIB Credit & Collections Survey July 2024
What is the average number of days beyond terms in these countries? India Russia Ukraine Venezuela 17 8 22 40 FCIB Credit & Collections Survey July 2024
Are payment delays increasing, decreasing, or staying the same? Russia India 100% 100% 100% 90% 90% 80% 80% 70% 70% 57% 60% 60% 50% 50% 43% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 0% 0% 0% 0% 0% Staying the Same Not Experiencing Decreasing Increasing Staying the Same Not Experiencing Decreasing Increasing Payment Delays Payment Delays FCIB Credit & Collections Survey July 2024
Are payment delays increasing, decreasing, or staying the same? Ukraine Venezuela 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 43% 40% 40% 40% 40% 29% 30% 30% 20% 20% 20% 14% 14% 10% 10% 0% 0% 0% Staying the Same Not Experiencing Decreasing Increasing Increasing Staying the Same Not Experiencing Decreasing Payment Delays Payment Delays FCIB Credit & Collections Survey July 2024
The most common causes of payment delays India Russia Other** 100% Government Approval 14% Government Approval 100% Central Bank Issues 29% Central Bank Issues 33% Unwilling to Pay 29% Unwilling to Pay 50% Inability to Pay 29% Inability to Pay 33% Customer Payment Policy* 67% Cultural Norms/Customs 29% Billing Disputes 50% Other Disputes 29% Foreign Exchange Rates 17% Customer Payment Policy* 71% Supply Chain/Shipping Issues 83% Billing Disputes 29% Cash Flow Issues 50% Cash Flow Issues 43% Cultural Norms/Customs 33% Supply Chain/Shipping Issues 43% Other Disputes 33% *(i.e. customer only pays on a set day of the month) **(Russian invasion of Ukraine) FCIB Credit & Collections Survey July 2024
The most common causes of payment delays Ukraine Venezuela Foreign Exchange Rates 33% Other** 50% Government Approval 33% Inability to Pay 50% Regulatory Issues 33% Foreign Exchange Rates 25% Other** 17% Customer Payment Policy* 50% Unwilling to Pay 33% Central Bank Issues 50% Other Disputes 33% Unwilling to Pay Cultural Norms/Customs 50% 33% Central Bank Issues 67% Cultural Norms/Customs 50% Inability to Pay 33% Other Disputes 75% Customer Payment Policy* 33% Billing Disputes 75% Billing Disputes 33% Cash Flow Issues 50% Cash Flow Issues 50% Supply Chain/Shipping Issues 50% Supply Chain/Shipping Issues 33% **(Russian invasion of Ukraine, corrupt elections and civil revolt) *(i.e. customer only pays on a set day of the month) FCIB Credit & Collections Survey July 2024
Methods used to secure payment India Russia 100% 120% 90% 100% 100% 80% 70% 80% 58% 60% 50% 60% 40% 40% 30% 17% 17% 20% 20% 8% 10% 0% 0% Check Credit card Wire Transfer Letter of Credit Check FCIB Credit & Collections Survey July 2024
Methods used to secure payment Ukraine Venezuela 100% 100% 90% 90% 80% 80% 75% 70% 70% 57% 60% 60% 50% 43% 50% 40% 40% 30% 30% 25% 20% 20% 10% 10% 0% Check Wire Transfer 0% Wire Transfer Check FCIB Credit & Collections Survey July 2024
Insights from Credit Professionals India Ukraine It's a tough country to collect from, and civil actions are difficult and lengthy. Maintain strong personal relationships and very clear documentation. Use credit insurance when pay-in-advance is not available. We stopped selling, as we were not getting payments in. Credit scoring & due diligence is becoming more and more important now with so many major customers failing to commit to their payments due to current situation. Venezuela Keep a close eye on these accounts based on experience payment delays. Make sure you have signed contracts (executed on both sides) and handle disputes timely. Expect disputes if payment is not received in advance. Our experience is to have downgrades of materials and incomplete payments when terms extended. Inherited a customer in this country. Would only have sold to them using cash in advance but the company we bought gave them open terms. FCIB Credit & Collections Survey July 2024
Insights from Credit Professionals Non-country-specific Advice from the survey. Know your real customer, not the Trade/Banner name but the True Legal Entity (5 C's of Credit). Start early building a relationship with your customer, and include your salesperson - you'll make a team and teams work together. Follow up with the customer's Procurement Dept and Finance Dept as many times as necessary. Obtain updated credit information Look for owner and addresses verification, as changes are often not communicated by the customer. Know all you can about the customer. Pull a credit report for payment history and legal status and name verification. With continued global inflation, war in Ukraine and high interest, you need to know your true legal customer to prevent fraud and keep your A/R secured. It is important to know customer's payment process to avoid misunderstandings or delays due to administrative issues. Obtain financial statements on your customers and backstop sales with credit insurance. Ensure payment language is on the wire payments received. FCIB Credit & Collections Survey July 2024
