HK businesses see 50% increase of bad debt write-offs: study
Almost half of the total value of business-to-business invoices was overdue.
A study indicated that businesses in Hong Kong said they were hardly hit by increasing levels of trade credit risk, with 6% saying their outstanding payments were tagged as bad debt and written off.
According to the Atradius Payment Practices Barometer Asia June 2022, this figure is up by 50% from 2021 when 4% of businesses said their outstanding payments were declared as bad debt.
The survey also showed that almost 5 in 10 businesses said their total invoices were reported as overdue whilst 46% of businesses said it was paid on time.
Nearly 100% of firms also said they used a wide range of procedures to reduce the impact of customer payment default on the business. The majority of these, or 54%, said boosting credit control function was important to the credit management process.
“Within this frame, bank references and customer financial statements remain the primary source of information they rely on to protect the business against customer payment default and bad debts,” read the study.
Over 200 people from Hong Kong firms were surveyed to review corporate payment practices.