Payment Behaviour of Estonian Companies Can Be Considered Satisfactory 

The current year’s Credit Policy Study of Krediidiinfo AS indicates that regardless of an increase in delayed payments, approximately 78% of companies are generally satisfied with their clients’ payment behaviour. 

According to a recent credit policy study, Estonia’s average payment term is 13 days, having increased by one day compared to the previous year. Two tendencies have become evident with regard to payment terms: first, increased demand for prepayment, which is used in 13 per cent of all invoices. Second, the share of invoices with the payment due period reaching 31-60 days has almost doubled, amounting to some 6.6% of all invoices. 

In terms of areas of activity, the longest payment periods are in effect in the sphere of wholesale: construction materials and equipment, foodstuffs, agricultural equipment and agricultural products. 

Compared to the previous year, the average period of late payment has significantly increased – in average, invoices are paid 13 days after due dates (the respective indicator of the year 2008 was 8 days). 54% of companies pay their invoices on time in Estonia – although this indicator is 7 percentage points less than in the previous year, it is still a rather positive result. 36.5% of companies pay their bills with a delay of 30 days and 9% of companies is more than 30 days late, incl. 0.8 per cent of companies that fail to pay invoices altogether. 

To discipline clients who have missed their payment due dates, companies mostly use cancelling of credit sales and demanding of prepayment. The importance of publishing information in the Credit Register has increased significantly. 

Upon granting credit to a new client, 75% of Estonian companies check for payment defaults and the background of the top executive of the new partner. Checking for payment defaults of existing clients has also become more widespread. 

Compared to previous years, the share of companies establishing credit limits has notably increased – approximately 40% of Estonian companies use credit limits to some or all of their clients.