French companies are taking longer and longer to pay their suppliers. The debt collection firm Arc reports that payment delays have reached a level not seen in twelve years. This deterioration affects all sectors and company sizes, a sign of widespread cash flow problems in a tense economic climate.
Average payment times have increased significantly over the past year. Companies regularly exceed the legal deadline of sixty days, a practice that puts a strain on small businesses and subcontractors. These delays create a domino effect throughout the economic chain, forcing some companies to draw on their reserves or resort to bank loans to maintain their operations.
A domino effect on cash flow
This situation reveals the growing financial pressures faced by economic actors. Persistent inflation, rising production costs, and slowing consumption are forcing managers to prioritize their various expenditures. Paying salaries and social security contributions is becoming the priority, pushing back the payment of supplier invoices. Debt collection experts have observed that this practice has been intensifying for several quarters.
SMEs on the front line
The consequences for creditors can be severe. Small and medium-sized enterprises (SMEs), which have limited financial flexibility, are particularly vulnerable. Some struggle to meet their own payment deadlines and see their situation deteriorate rapidly. Business failures remain high, fueled in part by these chronic cash flow problems.
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