Portuguese companies have reduced their average payment terms over the past decade, with the exception of 2016, when it increased again, yet Portugal ranks poorly in the European Union. Is that in Europe 44.7% of companies meet the agreed deadlines, while in Portugal only 17.2% of entities do. A number that is even much lower than the 21.7% followers that existed in Portugal in 2007, before the subprime crisis. The data, from 2021, comes from Informa D&B and shows that the top three worst payers are business services, with an average duration of 81 days, construction, with 100 days, and agriculture and other natural resources with an average of 104 days. .
The average payment term in Portugal was 67 days in 2021, four days less than in 2020, the first year of the pandemic. But in 2010 that was an average of 82 days, Informa D&B refers in the study “The relevance of purchases in the national economy”, which is now in its fifth edition. Small and micro enterprises have the greatest difficulty in paying on time, with average terms of 73 and 83 days respectively.
In terms of sector, the energy and environmental companies are the companies with the shortest payment terms: an average of 38 days. Real estate and retail activities have maturities of 56 and 59 days, followed by wholesale and hospitality with average maturities of 60 and 65 days. Industrial companies take an average of 69 days to pay their invoices, with this period being 76 days for the general services and transport sector. Finally, and in addition to the aforementioned top 3 worst payers, the average payment term of 78 days for information and communication technology entities should be highlighted.
271.3 billion euros in purchases in 2021
The study, presented today by Informa D&B at the conference of APCADEC – Associação Portuguesa de Compras e Provisionamento, also presents data from August 2022 showing that only 18.5% of companies pay on time. Of the defaulters, 67% pay up to 30 days late, 8.7% pay 30 to 90 days late and 5.8% pay more than 90 days, ie three months late. Under the theme “Procurement in Portugal: how to do it differently”, the event features speakers such as Nuno Fitas Mendes, Administrator of Portgás, Isabel Maria Santos, Director of Procurement at Sogrape, or Paulo Costa, Global Head of Procurement at Farfetch, among others.
Through the work of Informa D&B, we also learn that purchases by companies in Portugal in 2021 totaled €271.3 billion, between the acquisition of goods and supplies and external services, a value corresponding to an increase of 18% compared to last year and already surpassing pre-pandemic numbers. In addition, commercial companies represent “almost all” the value of purchases in Portugal, as the government was responsible for acquisitions of only €14.7 billion and the banking industry for €4.4 billion.
There were 355 thousand companies responsible for the €271 billion in spending on goods and services, with three sectors – manufacturing, wholesale and retail – accounting for two-thirds of the total. And while they represent only 9% of the total business universe, industrial companies accounted for 26.7% of the total amount spent on purchases, which includes raw materials as well as semi-finished products and goods, as well as supplies and services.
Broken down by type of purchase, five sectors account for about a third of the total amount spent on the purchase of goods: food wholesale, retail, appliance, automotive retail and food. ICT, construction, facility services, business services and transport, in turn, are the activities in which external supplies and services play the most important role.
Industry is most important
Of the 271 billion euros in purchases, 75% was made on the domestic market. In fact, all sectors of activity largely buy the goods and services they need in Portugal, with the industrial segment, wholesalers and ICTs being the ones with the largest weight in imports of materials and goods, with values of 39%, 33% and 31% respectively . It is therefore not surprising that general services, hospitality and real estate activities are the areas in which imports have the lowest weight, with only 4%, 3% and 2% respectively.
It is also not surprising to realize that large companies are most responsible for the costs incurred. Although they represent only 0.2% of the total corporate fabric, the 733 large companies accounted for more than €119 billion in purchases of goods and services, or 44% of the total. Micro firms, representing 94.5% of the corporate fabric, accounted for 20% of total spending, while small firms (4.3% of the universe) accounted for 17% of material purchases and medium firms (1% of all companies) 19% of the 271 billion secured.
The industrial sectors were the main consumers of raw materials and semi-finished products, representing 34.7% of the expenditure of large companies and 29.4% in the case of medium-sized companies.
Ilídia Pinto is a journalist for Dinheiro Vivo
Source: DN
