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ROMANIA-How late payment of invoices may impact your business?

Getting paid on time is a critical issue that affects businesses in general, as well as local and national economics, job creation, banking processes and procedures or individual worker’s every day.

Late payment of commercial invoices is forcing many small and medium size Romanian companies to make difficult decisions on how to manage the cash they have available: they may choose to cut salary payments, to increase bank loan or overdraft usage or even to pay their own suppliers late. Probably only small budgets are dedicated to manage debt portfolios or to the prevention of such issues.

Internally, the total cash flow is the first to be disrupted. Supervising the cash flow and making sure it is healthy helps to build a strong image before existing and potential business partners. Simply put: no cash, no business.

Once you get here, things get even more complicated. When suppliers are not paid on time they may not deliver the essential products or services needed to get work done. Additionally, employees may grow frustrated, work poorly, drop morale or leave the company. Also, both suppliers and employees might make complaints or ruin the good image of the company. Not last, if late payment penalties are involved, then  it costs the company more money.

One of the options a company has when it needs to protect itself would be to check business and credit worthiness of potential customers, before closing deals and also to carefully negotiate payment terms. Due diligence is performed by the book by more and more businesses in Romania.

Having to cope with longer payment times and the real possibility of non-payment can have a huge impact on any business. As time goes by, you will need more and more resources (time, money, effort) to collect these debts. One way to grow the chances of recovering the lost money would be to contract a specialized collection agency, in order to use time and money on other business issues which could help to grow, instead of wasting them.


Should you have further questions on our company or need information about your case, on the management or purchase of debts, do not hesitate to contact our colleagues or the Client Service.

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