Global Payment and Corporate Financing Reach Record High in Allianz Trade’s Year

In an era of rapid technological advancements and evolving global economic landscapes, corporate finance and risk management are experiencing unprecedented changes. Allianz Trade has released a comprehensive report highlighting the current state of global Days Sales Outstanding (DSO) and Working Capital Requirements (WCR).

The report delves into the analysis of payment terms and corporate financing needs on a global, regional, and sectoral level, revealing a significant increase in WCR for the third consecutive year. Globally, WCR has expanded to 76 days of turnover, with a two-day rise compared to the previous year, influenced by slowing economic growth and rising operating and financing costs.

The report also notes a universal trend of increasing WCR across major economic zones, with notable increases in countries like France, Germany, China, and Japan. Maxime Lemerle, lead analyst for insolvency research at Allianz Trade, stated, “Overall, half of the countries in our sample saw an increase in WCR in 2023, with notable rises in France, Germany, China, and Japan.”

The dynamics between Western Europe and the United States were also outlined in the report, showing moderate WCR increases in both regions. Inventory pressures played a significant role in Western Europe, while payment behaviors remained relatively stable at the regional level.

One of the key findings of the report was the largest increase in DSO since 2008, indicating longer payment wait times for companies. The report also highlighted the impact of profitability on payment terms, especially in Europe, where a decrease in profitability could lead to extended payment delays.

Allianz Trade’s introduction of Allianz Trade pay, a payment solution tailored for the B2B e-commerce sector, was also mentioned in the report. The report concludes with insights on potential macroeconomic effects and the competitiveness of European SMEs in light of proposed EU Late Payment regulations aimed at shortening payment terms significantly.