Cashflow interrupted: when customers simply don't pay

It's a feeling that many tradespeople know: One invoice reminder after another goes out, but the account balance remains at a standstill because the customer is ignoring you. The agreed work has been completed, but there is no trace of the consideration, aka payment, because the value of what has been done is not always measured in the same way.

While employees are paid at the beginning or end of the month as a matter of course, entrepreneurs have to ask for their money by issuing an invoice and hope that this "request" is honoured. If this doesn't happen, a stressful marathon begins that is almost absurd. Imagine this: A person goes to the hairdresser, gets a cut including brushing, then leaves without paying. Sounds unbelievable? It probably is. Unfortunately, when it comes to services that are not paid for immediately and in person, this description corresponds to reality more often than many people realise.

A tendency not to pay

A study by the EOS Group, a holding company that offers financial services in more than 20 countries, shows: Payment behaviour within Europe has changed drastically since 2019. One in five European companies now report experiencing financial bottlenecks due to late or non-payment. A lack of liquidity is considered one of the main reasons for insolvencies or job losses. If customers – and it doesn't matter whether they are private customers or B2B, i.e. from company to company – pay late or not at all, they are literally jeopardising other people's livelihoods.

Paul Krier, co-founder and CEO of Luxembourg Sports Network (LSN), a company that offers various online services to sports clubs and operates the amateur football portal FuPa Luxembourg, is also familiar with the stress caused by unpaid invoices. Krier himself has been self-employed for nine years and previously worked as a sole trader in his own name. A few small payment delays are common in the business, but when a customer suddenly stopped responding to LSN's invoices a year and a half ago, the entrepreneur's alarm bells started ringing. "Like virtually all private media, we finance 80 to 90 per cent of our business through advertising, which involves sums of between 500 and 5,000 euros per month, " explains Krier.