The level of uncollectable receivables climbed in each of the three countries surveyed namely Canada, Mexico and the USA. In Canada from 2.9% in 2011 to 5.2% in 2012; in Mexico from 4.3 in 2011 to 5.2% in 2012 and in the USA from 4.6% in 2011 to 5.6% in 2012. In comparison, uncollectable B2B receivables in Europe in 2012 averaged 3.0% of the value of the receivables of survey respondents (stable in comparison to the same survey period in 2011).

In Mexico, the situation with regard to domestic receivables was more pronounced with 5.6% uncollectable compared to 4.1% of foreign receivables. In Canada and the USA foreign receivables represented a greater risk than did domestic receivables. The issue was more severe in the US with 5.1% of domestic and 6.6% of foreign receivables uncollected than in Canada where 4.8% of domestic and 5.8% of foreign receivables were uncollectable.

Overall the percentage of late receivables has not increased that much in North America in 2012 compared to 2011, but more of these overdue receivables are remaining outstanding longer and more are resulting in payment defaults. As a result the average Days Sales Outstanding (DSO) across the region has also been creeping up. Approximately 23.3% of the survey respondents experienced an increase in their DSO over the past 12 months compared to 7.8% for whom DSO decreased. The average DSO for the region was 42.7 days which exceeded the average payment term of 34.3 days by 8 days. Mexico had the highest average DSO, 50.7 days followed by the US, 38.0 days and Canada 36.8 days.

Richard Ariens, Regional Director of Atradius Credit Insurance commented, "The climbing rate of payment default highlights that this remains a very unstable period in the economic cycle. Business insolvencies remain at high levels as businesses often pursue growth too aggressively overestimating demand in the early stages of the recovery."

Andreas Tesch, CMO of Atradius N.V. added, "Insolvencies in the United States have been declining for the past two years. The survey responses showing an increase in uncollectable receivables highlights the fact that lower insolvency rates do not necessarily translate into fewer payment defaults. To the contrary, it emphasizes the importance of due diligence and protection against payment defaults."

The complete report highlighting the findings of the North American edition of the 2012 Atradius Payment Practices Barometer can be found in the Publications section of the http://www.atradius.com website.

Atradius