Half of receivables is not received on the due date and another 6 percent is written off as bad debts, a survey of businesses has found.
Trade credit insurer Atradius surveyed 200 businesses, who said they transacted an average of 58 percent of their business-to-business sales on credit, and the figure is on the rise, driven by loyalty and lack of liquidity.
But 48 percent of the dues are paid late, and another 6 percent are uncollectible, they said.
Nearly half said their days sales outstanding (the average number of days it takes for a company to collect payment for a sale) rate is worsening.
Customers defaulted mainly due to liquidity issues and administrative inefficiencies, especially in the agriculture and food industry, 70 and 52 percent of the respondents said. A quarter blamed it on disputes mostly in the steel/metals industry.
Another reason cited was intentional late payment for various reasons, chiefly in the textile/clothing and chemicals industries.
Speaking to VnExpress, Atradius director for Vietnam, Vu Thi Duc Hanh, said late payment is not uncommon and firms should be adaptive to protect themselves.
Vietnam’s late payment ratio is higher than the Asian average, but its overdue and bad debts are lower, according to Atradius data.
This is the first time Atradius conducted its payment practices barometer in Vietnam.
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