More than half of companies across Europe reported operational difficulty due to late payments in 2024, and in many B2B and government-to-business transactions, average payment periods exceeded 60 days, according to the European Commission’s EU Payment Observatory Annual Report 2025.
Those delays aren’t being driven by newly onboarded customers or weak credit approval. They’re concentrated among large, established organisations with long trading histories.
Most credit frameworks are designed to decide who to trade with. Very few are designed to keep asking how payment behaviour evolves once trading feels safe.
It’s this gap where most credit exposure quietly builds. For finance teams, this matters because existing customers combine scale, leverage and internal tolerance. When payment behaviour deteriorates inside those accounts, the impact on cash flow is immediate and often material.
Why risk hides in plain sight
Behaviour moves before credit metrics do
Customers rarely default without warning. What changes first are signals inside your own ledger: partial payments, broken promises, repeat extensions and growing dispute volumes. External credit scores and annual reviews lag these shifts. By the time a downgrade appears, cash pressure has often already set in.
Late payment becomes culturally accepted
Over time, exceptions stop feeling exceptional. Delays from long-standing customers are rationalised as commercial reality, market pressure or relationship management. Escalation slows, follow-up softens and terms stretch without a clear decision point. Late payment becomes a pattern, not an incident.
Process friction masks real risk
UK government research shows that late payment is frequently driven by invoice disputes and administrative issues rather than outright refusal to pay. For established customers with complex billing, approval or documentation requirements, these frictions can repeat cycle after cycle. The risk isn’t that the customer won’t pay, but that cash arrival becomes increasingly unpredictable.
Concentration magnifies exposure
A new customer paying late is visible and contained. A top-ten customer slipping by ten or fifteen days over several cycles quietly locks up significant working capital. The exposure feels lower because the relationship feels secure but the financial impact is often far greater.
What strong finance teams do differently
High-performing finance teams stop treating existing customers as static credit decisions and start treating them as dynamic risk profiles.
- They review payment behaviour as frequently as they review exposure.
- They separate relationship value from payment discipline.
- They define clear thresholds for when drift becomes escalation.
- They track leading indicators such as promise-to-pay reliability, dispute recurrence and changes in remittance patterns.
- They align sales and finance around a shared understanding that revenue quality includes predictability of cash, not just contract value.
Most importantly, they accept an uncomfortable truth: late payment is rarely just a customer issue. It’s often a governance issue that emerges slowly inside trusted relationships.
The biggest credit surprises don’t come from customers you do not know. They come from the ones you assumed no longer needed watching.
When familiarity becomes risk
If payment delays tend to surface first in your largest, longest-standing accounts, if extensions start to feel routine rather than exceptional, if escalation feels harder with customers who ‘always pay in the end’, and if DSO drifts without a clear moment when it became acceptable, the issue is unlikely to be your credit policy. It’s more often a gap between how quickly behaviour changes and how slowly governance responds.
More about Baker Ing
At Baker Ing, we understand that familiarity can lower urgency, relationships can soften discipline and risk can accumulate quietly while nothing appears formally broken. However, the strongest finance teams notice this early and challenge drift before it embeds because by the time late payment feels normal, the exposure is already real.
For expert assistance, get in touch with our specialists.