B2B payment practices trends, Canada 2024

Financial struggles persist for businesses across Canada

Poor payment practices from B2B customers have been a persistent issue during the past 12 months for almost half of the Canadian companies surveyed across various industries. The energy/fuel sector appears to be the hardest hit by payment delays arising from B2B trade on credit, with a consequent strain on businesses’ financial health. Overall, there is a highly diverse landscape in B2B payment trends impacting on businesses in Canada. 25% of companies report a worsening of B2B customer payment behaviour, while a similar percentage tell us there has been an improvement. This difference is also equally split across the agri-food and consumer durables industries.

This mixed landscape of B2B payment trends translates into an average 46% of B2B trade credit invoices being overdue, while bad debts written off as uncollectable stand at an average 6% of all B2B invoices. Payment delays extend the time taken to turn overdue invoices into cash by an average of one month beyond the due date. Agri-food and consumer durables companies in Canada experience the longest delays, with a consequent strain on the financial health and operational efficiency of businesses. The main reason cited for late payments are challenges in the B2B customer payment process, while in the agri-food sector another factor is supply chain disruptions

Widespread concern about rising trend of insolvencies

More than half of businesses in our survey of Canada tell us they are bracing for a further worsening of insolvency levels during the year ahead as they continue to grapple with financial challenges including the high costs of servicing debts. A notable 55% of companies, particularly in the energy/fuel sector, express this major concern, with a potential impact of severe financial distress ahead. Some agrifood and consumer durables companies are a little more optimistic, anticipating no significant change in insolvency levels, while 42% of businesses say they expect Days-SalesOutstanding (DSO) to remain steady in the coming months. 30% of companies foresee improvement in debt collection efficiency, and the remainder a deterioration in DSO.

The Atradius Payment Practices Barometer is an annual survey of business-to-business (B2B) payment practices in markets across the world. Its findings can give valuable insights into the current dynamics of corporate payment behaviour in B2B trade. It can also help companies doing business, or planning to do so, in the markets polled to identify emerging future trends in the payment practices of B2B customers. 

Interested in finding out more?

For a complete overview of the 2024 survey results for Canada and North America (USMCA), please download the full reports available in the related documents section below.