The latestAtradius Payment Practices Barometer survey reveals a sharply divided Asian corporate sector on the outlook for insolvency risk, as companies navigate persistent late payments, tightening liquidity, and global trade policy uncertainty.
The Atradius 2025 survey — conducted across China, Hong Kong, India, Indonesia, Japan, Singapore, Taiwan, and Vietnam in the latter half of Q2 — found that nearly half of businesses expect stable payment behaviour from their customers in the months ahead, while an almost equal number foresee worsening payment risk.
Late payments continue to weigh heavily on operations, affecting 44% of B2B credit sales across Asia. While bad debts average a seemingly modest 5% of total sales, Atradius notes that such losses can significantly erode profitability. Businesses cited customer liquidity problems, delays in payment processing, invoice disputes, and supply chain disruptions as the most common reasons for overdue invoices.
Despite these risks, the report shows resilience in trade relationships. Around 60% of companies have expanded trade credit offerings to support customer loyalty and boost sales, though most have kept payment terms steady at an average of 48 days. Currently, 54% of all B2B transactions in Asia are conducted on credit, underscoring its critical role in facilitating trade.
Financing strategies have also evolved to meet these challenges. Over the past 12 months, Asian businesses have relied on bank loans, invoice financing, and internal funds to maintain liquidity while keeping payment risk in check.
Looking forward, the survey paints a picture of a region grappling with mixed expectations around inventory turnover and days sales outstanding (DSO) — the average time taken to collect payments. While some firms anticipate improvements, others are bracing for delays as macroeconomic challenges persist.
Key concerns include in the Atradius Payment Practices Barometer survey:
Ongoing global trade uncertainties affecting supply chains and customer demand.
Increasing regulatory compliance burdens that demand more resources.
Pressure to adopt sustainable business practices to address environmental concerns.
Despite these headwinds, sales and profitability forecasts remain cautiously optimistic. Many companies are adopting proactive payment risk management strategies, including outsourcing credit risk management, to supplement traditional in-house measures.
“The latest findings reveal critical insights into the operational challenges faced by businesses in Asia,” said Eric den Boogert, Managing Director of Atradius in Asia. “Issues like increasing bad debts, compliance pressures, and sustainability initiatives are prominent. However, there is also cautious optimism as companies adapt to market changes, ensure optimal liquidity, and effectively manage risk.”
