This is the first corporate payment survey in Turkey aiming at indicating how payment terms stand in different sectors, how companies manage credit management practices and evaluate future payment experiences. The data collection was conducted in January and February 2018 with 2615 companies in 81 cities. While 73% of respondents said they sold with credit terms to their clients, 35.3% of them mentioned they do not have a department responsible for credit management.
Despite positive expectations about the economic growth performance, 45% of respondents said they expect payment terms to lengthen in 2018 while 40.8% expect them to remain flat.
Only 0.1% said they have a department in charge of trade receivables management. Large companies (having a total employee number of more than 250 people) are able to offer their clients longer payment terms, mainly due to their wider financial means.
Payment delays appear to be a general case for Turkish businesses. 55.5% of respondents said payments delays increased in 2017 compared with a year earlier. On average, payment delays stood at 133 days. Longest delays had been recorded in automotive, textile-clothing, retail and transportation.
Majority of the respondents (41.3%) said total overdue payments over 1 year accounted for between 1% to 5% of their annual turnover. However those for which it represented more than 5% of the annual turnover.
Cash flow management is very important for Turkish companies as the economy is exposed to sudden and wide fluctuations in the foreign exchange rates. In periods of sharp lira depreciation, companies hit by rising costs of imported raw materials and lower profit margins.
Despite strong growth dynamics of the country, 50% of respondents said their cashflow management deteriorated in 2017 from a year earlier and 71% expressed it became more difficult to make collections from the market. On the positive side, more than one third of
respondents expressed their positive expectations about their sales volume in 2018. More than half of exporting companies said they expect their exports volume to increase in 2018 which is in line with Turkey’s good export performance.
Positive economic expectations regarding economic performance and exports
17.5% of participants said they export their products and services. 55.4 % of exporting companies said they expect an increase in their exports as well. This is in line with Turkey’s macroeconomic dynamics. Driven by solid growth in European countries, Turkey’s main trading partners, Turkey’s exports rose 10% in 2017 from a year earlier. This trend is expected to continue with the lira’s depreciation, continued increase in global trade volumes and the growth in Europe.
Romania is among the countries with which Turkey has growing trade relations. Turkey’s exports to Romania amounted to EUR 3 MLD in 2017, an increase compared to the previous year, when they amounted to EUR 2.5 million, according to the National Institute of Statistics.
Exports to Romania accounted for 1.8% of total exports by Turkey in 2016. Our country imports mainly from Turkey: machinery (22%), metals (20%), textiles (15%), plastics and rubber (9% 4.7%), vegetal products (5.1%), foodstuff (2.6%).
Turkey’s economy expanded by 7.4% in 2017, driven by strong growth in industry, services and construction. This strong performance has resulted in fairly optimistic perspectives among respondents. 37.9% said they expect economy to improve in 2018 while 34.3% said economic conditions would remain the same – see document