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Summary conclusion
Respondents from Hong Kong were some of the most likely to suffer a financial impact as a result of the late payment of invoices by their customers. As a result, they tended to be more likely than average to increase their use of a number of credit management practices. They were also more focussed on having reliable current information about their customers’ ability to pay for the products and services they purchase before extending credit.
This reliance on current financial information likely plays a meaningful role in the decisions about payment terms. Respondents from Hong Kong were less likely to use standard payment terms rather showing more flexibility to customise their terms to the expectations of their customers’ payment behaviour. This translated into a greater likelihood of differentiating payment terms when selling to foreign customers than to domestic customers.
Generally a greater susceptibility to the impacts of late payments necessitates more creative use of credit management practices in Hong Kong and more flexibility in determining payment terms. While this has not alleviated all of the potential risks involved with trading on credit, respondents from Hong Kong have been responsive to the risks they are facing and proactive in trying to minimise them.
What do you do differently in your credit sales with domestic buyers compared to foreign buyers?
Basis: companies surveyed in Hong Kong
Source: Payment practices barometer - Summer 2010
 Download full Payment Practices Barometer report on Hong Kong
To download the group report as well as other country results, click here.
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Date: September 2010
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Credit Risk Reports 
