Analysts from SPARK-Interfax have studied settlements with suppliers from companies included in the government's list of the most affected industries. It turned out that their payment discipline was lame even before the pandemic, and companies had a certain practice in settlements with suppliers. Alexey Morsin, Head of the SPARK Payments Monitoring Program, Interfax Group, talks about the main findings of the study.

Reluctant non-payers - that is how one might say sympathetically about companies operating in the affected industries. External factors, quarantine closures, and the announcement of numerous non-working days - all of this inevitably led to a disruption in business activity and an obvious reduction in funds for paying for providers.

To understand how badly companies from these industries have suffered, SPARK-Interfax analysts studied the practice of settlements for companies providing services in 24 out of 48 types of activities included in the list. These include retail trade, road transport, beauty salons, media, travel companies, fitness clubs and others. Analysts studied the calculations from January to June 2020 and compared them with the figures over the past five years.



Five conclusions can be drawn.

--The affected industries did not have excellent payment discipline even before the pandemic.

The level of settlements with suppliers, which collapsed in the crisis year of 2015, has been gradually recovering in recent years. Last year was perhaps the best in recent times. Even then, the share of timely payments in most of the analyzed industries was in the range of 65-75%, depending on the month and industry, and the share of payments overdue for more than 90 days - from 2% to 5%. On the whole, this is close to the all-Russian indicators (73.4% and 5.2%, respectively).

Of course, a certain industry specificity is noticeable - for example, travel agencies and non-grocery stores are somewhat more likely than others to be overdue, while organizations that provide road transport services, on the contrary, are more likely to pay without delay. Perhaps this is influenced by the different proportion of individual clients in the client base of companies in the industries. Income from individuals is less stable and predictable than from long-term contracts with corporate clients. And less stable cash flows from customers lead to interruptions in payments to suppliers.

-- For the affected industries that represent the service sector, certain established average levels of settlements with suppliers have emerged.

Interestingly, the growth in the volume of payment information due to new suppliers - participants in the system, an increase in the number of companies in monthly samples does not lead to sharp leaps in the structure of settlements with suppliers. The share of payments without delay is closer to 60-70%, with a delay of up to 30 days - closer to 15-20%, with a delay of more than 90 days - closer to 2-3%.

Companies have the least number of delays of 31-60 days and 61-90 days, the total share of payments with such delays averages only 2-4%. This is generally comparable to the level of payment discipline in the service sector in the United States and European countries, according to the results of the annual global survey of the level of payment discipline of business in the countries of the world Dun & Bradstreet Payment Study.

-- The level of settlements with suppliers in April did not stop at all.

The introduction of quarantine measures, as expected, hit hard on service companies. In April and May, the number of companies in the samples declined, reflecting the downturn in business activity. However, the "payment Armageddon" did not happen. The share of timely payments in most of the analyzed industries in April fell to 40-55% against the usual levels of 65-75% before the start of the pandemic, and the share of overdue payments for more than three months increased from 2-5% to 18-25%.



-- In April, those industries where companies were forced to completely stop their business suffered the most.

For example, hairdressers and beauty salons have cut the share of timely payments by almost half, to 35% compared to the usual levels of 2019, and payments overdue for more than 90 days have grown almost tenfold to 48%. Fitness centers showed similar results: the number of bills paid almost halved, to 37%, and increased almost tenfold, to 46.5% compared to the usual settlement levels last year. On the other hand, TV and radio companies were the least affected by the crisis, with a decrease in timely payments from 80-82% to 75%. Delayed payments have roughly doubled, to 10.9%, compared to last year's normal levels.

-- May and early June data indicate a recovery in the level of settlements with suppliers.

As the self-isolation regime weakened, business was expected to revive, which is confirmed by various sources, in particular, data from online cash registers. The revival also affected the payment discipline of the suffering industries. The leaders in restoring payment discipline were companies that provide additional education services: sports clubs, centers for additional education, and so on. They already had a V-shaped recovery of the settlement level in May. Probably, this was facilitated by the opportunity for companies in the industry to quickly switch to the format of distance learning, as well as the growing demand for this format from customers during non-working days and the self-isolation regime.