Planned Amendment to the EU Late Payment Directive: What You Need to Know

Hamburg, 06.02.2024

The European Commission is planning a groundbreaking amendment to the EU Late Payment Directive that would oblige companies to pay their suppliers within 30 days with no exceptions. This was announced in adraft in September 2023. The measure is intended to help combat late payment in business transactions. In the context of the current discussions, many companies must now consider the impact on their working capital and financing requirements.

The current Late Payment Directive from 2011 requires companies to pay invoices within 60 days, unless they have explicitly agreed otherwise with their suppliers and this is not grossly unfair. Public authorities must pay for the goods and services they procure within 30 days or, in very exceptional cases, within 60 days.

According to the EU Commission, the previous regulation has not proved effective for small and medium-sized enterprises (SMEs). Only 40% of invoices between companies are paid on time and one in four insolvencies is due to invoices not being paid or not being paid on time. The proposed amendment to the directive now aims to harmonize payment practices and create a fairer and more transparent business environment.

cflox pay as a solution for working capital optimization without supplier involvement

In this emerging environment, cflox presents its cflox pay solution. The innovative technology offers companies the opportunity to extend their payment terms - without IT integration and supplier involvement. Suppliers receive their money punctually on the agreed payment date (e.g. after 30 days). However, companies are not debited until 60 days later.

Thanks to this intelligent working capital optimization, cflox pay provides the necessary flexibility to comply with the potential new EU directive - in line with active working capital management and necessary financing. Many customers from various industries are already using cflox pay, such as Weltbild CEO Christian Sailer. He says: "With cflox pay as a digital payment instrument, we are able to settle supplier invoices at a suitable time within the payment term, even if there is a change to the Late Payment Directive."

Demand for cflox pay is expected to increase further as a result of the anticipated legal changes.

About cflox

cflox is the market for cash flow, working capital and financing within the supply chain. As a leading provider of discounting, supply chain finance and corporate payments, cflox offers customers individually tailored solutions.

For more information, visit cflox.com

Press contact

Leonie Bauer
Content & Communications Manager

cflox GmbH
Gaußstraße 190c
22765 Hamburg

T +49 1639267362
E l.bauer@cflox.com

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