Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.


60% of UK SMEs had used trade credit in the previous six months – twice the Europe-wide average of 32%

A comprehensive benchmarking study of European SMEs undertaken by Mazars, a leading specialist in audit, tax and advisory services, has revealed stark differences in working capital policies and procedures in different parts of Europe. By benchmarking European SMEs in this way, the Mazars study revealed different attitudes to debt, as well as the most common borrowing facilities that these businesses rely upon.

The report reveals, for example, that 60% of UK SMEs had used trade credit in the previous six months – which is nearly twice the Europe-wide average of 32%.  The study also showed that SMEs in Ireland (64%) were the biggest users of trade credit.  By comparison, just 17% of SMEs in France and 15% of SMEs in Germany reported using this form of credit during the previous six months.

The study, which covers the period from 2008 through 2013, also examined the similarities and differences of SME performance in Germany, Sweden, Netherlands, Portugal, Spain, France, Ireland and the UK, and includes analysis, insights, lessons learnt and guidance for SMEs across the globe.

Amongst its other findings, the report showed that UK SMEs used bank overdrafts, credit lines and credit cards more often than their European counterparts during the previous six months. Nearly half (45%) of UK SMEs included in the Mazars study reported using credit facilities like these, compared to an average of 39% across Europe.  SMEs in Ireland were the most likely to use this form of credit (60%), compared to just 7% of Swedish SMEs.

The findings, based on detailed information provided by Mazars’ clients as well as extensive EU and national level research, also revealed that the average number of payment days across Europe varies considerably. Whilst SMEs in Sweden currently report an average of 35 payment days – the lowest number of all the countries surveyed – this number jumps to 44 days for SMEs in the UK and even higher, to an incredible 97 payment days, for SMEs operating in Spain.

Figures like these suggest that some European SMEs will need to focus on improving working capital management, since late payments can cause significant financial problems for small businesses and create an extended need for financing.

David Smithson, UK Head of SMEs at Mazars says:

“Financial discipline and a focus on investing in the core business is a hallmark of a successful SME business, particularly for companies operating in countries such as Germany and Sweden, yet many of the European SMEs that we examined were distracted by ancillary or non-core business investments. As such, the access to finance debate, which is very prominent within the SME market, also needs to consider the lessons learnt from the financial crisis in order to ensure that these companies have adequate funds for their business in the long-term.

“Simply reviewing these lessons won’t be enough, however; these policies and procedures must also be hardcoded into practice. SMEs should ensure that their working capital policies and procedures are both rigorous and carefully controlled. They also need to have clear guidelines on how to accept or reject new customers, and must focus on areas such as price negotiation and credit terms in order to reduce the prospect of excessive bad debts and cashflow difficulties. For any SMEs that want to compete successfully in Europe, attention to all of these areas will be vital.”