Late payments remain one of the most persistent threats to business cash flow across Europe. The EU Payment Observatory Annual Report 2025, published by the European Commission, confirms that the situation has worsened again in 2024, particularly for small and medium-sized enterprises (SMEs).
For Irish businesses, the findings are especially relevant. Rising payment delays, long payment terms and weak enforcement continue to increase credit risk and place unnecessary pressure on working capital. At CMOS, we work with Irish companies every day that are feeling these impacts first-hand.
This blog post summarises the key findings of the EU Payment Observatory Annual Report 2025 and explains what they mean for credit management, credit control, and debt recovery in Ireland.
Late Payments Are Getting Worse Across the EU
According to the EU Payment Observatory Annual Report 2025:
- 52% of European companies experienced problems due to late payment in 2024, up from 47% in 2023 and 42% in 2021.
- Late payments have now become a structural issue rather than a temporary post-pandemic disruption.
- Economic uncertainty and slower growth are making businesses both slower to pay and more anxious about getting paid.
Late payment are no longer an occasional inconvenience, they are a systematic risk affecting business resilience across the EU.
Payment Periods Remain Excessively Long
The report highlights that payment periods remain far above what EU law intends:
- B2B (business-to-business) payments average 3 days across the EU.
- G2B (government-to-business) payments average 8 days, despite public authorities being legally required to pay within 30 days (with limited exceptions).
Public authorities pay, on average, 9.5 days later than private businesses, a critical issue for SMEs that rely on predictable cash flow.
For Irish suppliers, particularly those operating in construction, professional services and public-sector contracting, these long payment periods translate directly into working capital strain and higher reliance on overdrafts or shot-term finance.
Long Payment Terms Drive Late Payment
One of the clearest conclusions in the report is the strong link between payment terms and actual payment behaviour:
- Longer payment terms correlate with longer payment periods in 87% of cases.
- Average payment terms in 2024 were:
- 43 days for B2B transactions
- 9 days for G2b transactions
Many SMEs accept extended payment terms simply to protect commercial relationships, even when those terms damage cash flow. This confirms what credit management professionals already know: unfair terms often lead to late payment, even when invoices are technically paid “on time”.
Company Size Matters, and SMEs Pay the Price
The EU Payment Observatory confirms a consistent pattern:
- Large companies are the least likely to pay on time.
- Micro and small businesses are the most punctual payers, yet suffer the greatest impact when customers pay late.
The Real Cost of Late Payments
The report outline the wider consequences of poor payment practices:
- 40% of businesses report reduced investment and growth due to late payments.
- 31% say late payment threaten their business survival.
- Companies spend an average of 85 hours per week chasing overdue invoices.
- Businesses facing late payments are more likely to struggle with access to finance.
The EU Payment Observatory estimates that over €100 billion in additional cash flow could be unlocked annually if late payments were eliminated for micro businesses, SMEs, and mid-sized companies.
What the Report Means for Credit Management in Ireland
Ireland is among the Member States where:
- The share of companies affected by late payments increased in 2024.
- B2B payment periods lengthened, despite EU-wide improvements in some countries.
This underlines the need for Irish businesses to take a proactive approach to credit risk management, rather than relying on informal follow-ups and goodwill.
The findings of the EU Payment Observatory Annual Report 2025 point to clear actions for Irish businesses:
- Strengthen Credit Control Process
Clear payment terms, credit limits and consistent follow-ups are essential to reducing Days Sales Outstanding (DSO).
- Monitor Payment Behaviour
Late payment patterns are often behavioural. Ongoing monitoring helps identify risk before invoices become unmanageable.
- Act Early on Overdue Invoices
Early-stage debt recovery is significantly more effective than delayed escalation.
- Use Professional Credit Management Support
Outsourcing credit control or debt recovery allows internal teams to focus on growth while improving cash flow predictability.
How CMOS Helps Irish Businesses Get Paid Faster
At Credit Management Outsource Solutions (CMOS), we support Irish businesses with:
- Professional credit management and credit control services
- Debt recovery solutions that protect customer relationships
- Cash flow improvement strategies aligned with EU payment regulations
- Support in reducing DSO and exposure to late-payment risk
If late payments are impacting your cash flow, call (01) 8860190 or email business@cmos.ie today.
