Municipalities still paying bills late

Reading time 5 minutes | Written by Anne de Geus | June 6, 2012

Press releases

Almost 80 percent of Dutch municipalities are still unable to pay bills to businesses within 30 days. This is evident from an analysis carried out by Dun & Bradstreet at the request of MKB-Nederland.

Municipalities still paying bills late

Of the 303 municipalities surveyed, 21 percent only pay between 46 and 87 days after the invoice date. Borne in Overijssel comes out on top: there, companies receive their money within 17 days on average.

MKB-Nederland has for some time now been urging governments to improve their payment behaviour to small and medium-sized enterprises. Precisely because the liquidity position of many businesses is still under pressure, it is more important than ever that customers - and the government in particular - pay their bills on time. Central government now manages to pay within 30 days in most cases, but local authorities are still clearly lagging behind, according to the employers' organization.

The 303 municipalities surveyed by Dun & Bradstreet take an average of 38.5 days to pay their bills. Two percent (six municipalities) pay faster than the usual 30 days. Borne is the fastest in the Netherlands with 17 days, followed by Oldenzaal (20), Oostflakkee (21), Enschede (22), Maasdonk (26) and Borsele (29). Almost 20 percent (57 municipalities) pay on average 30 days after the invoice date. One third (90 municipalities) pay the bill in 30 to 35 days, another 28 percent (85 municipalities) need 36 to 45 days. In 21 percent of the municipalities (65) entrepreneurs have to wait 46 to as much as 90 days for their money.

MKB-Nederland notes that although more and more municipalities are aware of this problem, in practice there is still a world to be won. Municipalities that want to have a business-friendly climate simply cannot make local businesses wait that long for their money. For SMEs, local governments are often important clients. On average, one in three SME entrepreneurs is regularly commissioned by a municipality.

Ranking

At the request of MKB-Nederland, Dun & Bradstreet has mapped out the actual payment behaviour (in number of days delayed) of the Dutch municipalities. MKB-Nederland has drawn up a ranking on the basis of these data. The ranking shows what payment terms the municipalities formally apply (the purchasing conditions) and the extent to which they observe them in practice. A municipality that uses a payment term of 14 days and exceeds this by 12 days scores better on this list than a municipality that uses 30 days and actually pays within this period.

Explanation ranking

The ranking is based on the average number of days within which an invoice is paid. This was calculated by combining the D&B Paydex and the municipalities' purchasing conditions.

D&B Paydex: Average number of days delayed payment (after invoice due date) based on payment experiences. One experience concerns all invoices from 1 business relation over a period of up to 20 months. The paydex is a weighted average that also takes into account the size of the invoice amounts. The paydex is based on all experiences and invoices known to D&B and therefore only includes part of all invoices sent to a municipality. There is a threshold of the minimum number of experiences that must be known to be included in the analysis.

Large: a minimum of 30 experiences
Means: minimum 15 experiences
Small: minimum 10 experiences

Purchase conditions: Payment period formally used by municipalities (according to website).

Paydex + purchasing conditions = Average number of days within which an invoice is paid.

With an equal number of days in this calculation, we looked at the percentage of experiences where payment was made within the agreed upon time frame. If this percentage is also equal, the municipality with the most experiences comes highest in the list.

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Anne de Geus

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