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October 22, 2021

Account receivable recovery by companies in Romania exceeds two months

Companies in Romania have a huge potential in terms of managing receivables, inventories and current debts. Fifty-seven per cent of the respondents to a benchmark survey ‘Working Capital Management” by management consulting firm Horvath & Partners believe liquidity to be quite important for a company’s operation, with 81 per cent of the interviewees considering that Working Capital Management has increasingly been applied by companies over the past year. The study clearly shows the practice by companies in Romania to substantially delay payments to suppliers – an average of 208 days in the pharmaceutical and telecommunication sectors – as a means to offset their protracted recovery of receivables owed, in 110 and 96 days respectively.

Twenty-seven per cent of the respondents see receivables as the most important element to improving liquidity. Romanian companies need an average of 78 days to recover their receivables, with the retail industry being the fastest, 34 days. The survey was conducted in partnership with the Valoris Company on a sample of 143 questionnaires and financial data from 300 companies doing business in Romania.

Another study by Horvath & Partners shows that the commercial risk on the Romanian market shows the huge potential companies have over handling receivables and estimating the commercial risk regarding the relationship between customer and supplier. More exactly, more than 60 per cent of the respondent companies assess customers before entering a contractual relationship with them. In word at least, 47 per cent of the companies interviewed said they have been doing it for more than three years now.

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