REPORT ON LATE PAYMENTS: STUDY ON PAYMENT TERMS IN SPAIN 2024
- PMcM calls for “an immediate solution” and insists that “governments, to demonstrate their true commitment, must start by ensuring that they comply with the rules they establish. At this time, when public administrations are increasing their revenue, there is no justification for worsening payment terms and they should be the first to respect the deadlines they impose, setting an example for the private sector.
- In 2024, the average payment term in the public sector increased by 12 days (up to an average of 67 days), while in the private sector, it decreased by 6 days (to an average of 64 days). In both cases, these figures exceed the payment deadlines established by the Spanish Law 15/2010: a total of 30 days for public administrations and 60 days for companies.
- 61% of suppliers face payment terms longer than those allowed by law, without any consequences for this illegal practice. 92% of suppliers did not claim the legal compensation for recovery costs in cases of delay or non-payment, and 84% never or almost never demanded interests from their late payers’ clients.
Madrid, March 6, 2024 – The Multisectoral Platform Against Late Payments (PMcM) has confirmed the persistence of long-term payments for suppliers, both in B2B and G2B transactions. Once again, these terms exceed the legal deadlines, according to the latest edition of its “Report on Late Payments: Study on Payment Terms in Spain 2024”, based on more than 500 surveys conducted among its members, as well as non-member organisations.
In 2024, the average payment term in G2B transactions increased by 12 days (reaching an average of 67 days), while in B2B transactions it decreased by 6 days (to an average of 64 days). In both cases, these figures exceed the payment deadlines established by Law 15/2010: a maximum of 30 days for public administrations and 60 days for companies.
Regarding the public sector specifically, the president of PMcM, Antoni Cañete, highlights that this increase is alarming: for the first time since 2014, the average payment term in G2B transactions has exceeded that of companies (67 days in G2B vs 64 in B2B), with the added concern that the maximum legal term for Public Administrations is only 30 days, half of what is required to companies”.
The analysis also reveals that more than half of the respondents (52%) believe that Local Administration takes the longest to pay. The second worst payer is Regional Administration, according to 28% of respondents, followed by the Central Administration (20% of respondents). Specifically, payment terms exceeded the legal period for 76% of Local Administration cases, 78% of Regional Administration suppliers, and 80% of Central Administration suppliers. In light of these figures, Cañete calls for “an immediate solution” and insists that “governments, to demonstrate their true commitment, must start by ensuring they comply with the rules they themselves establish. At a time when the Administration is increasing its revenue, there is no justification for worsening payment terms. They should be the first to respect deadlines they impose, setting an example for the private sector”.
The data obtained by PMcM differ from the information provided by the governments regarding their payment terms, which tend to be more optimistic and closer to the legal deadline. This gap has been confirmed by the EU Payment Observatory in its 2024 Annual Report, which highlights that the data reported by Spain’s Public Administrations does not align with the findings of specialized entities such as PMcM.
In this regard, Cañete suggests that one possible explanation for this gap could lie in part, in “certain bad practices”. For example, a case recently detected in the Lugo City Council, where it was allegedly delaying the registration of invoices on purpose, effectively postponing the official start of the payment period beyond when it should have started. “If this is true, we must put an immediate stop to this practice because all Public Administrations must comply with the law”, insists the PMcM president. He also calls for “appropriate modifications to be made to the electronic invoicing system (FACe) to prevent this modus operandi from happening again”.
At the European level, PMcM welcomes the fact that the fight against late payments remains a priority for the European Commission, keeping it on its Working Programme for 2025. Additionally, the organisation is hopeful that the legislative process of the new Regulation will soon move forward. This regulation will be mandatory and aims to penalise late payers if they exceed the general payment term of 30 days (or 60 days in cases requiring a certification period).
Private sector: payments to subcontractors take 88 days.
The “Report on Late Payments: study on payment terms in Spain 2024” also analyses average payment terms in the private sector. According to 56% of the respondents, the type of client that takes the longest to pay (based on company size) is large companies (those with a turnover exceeding €50 million). When asked how long large companies typically take to pay them, 74% of respondents stated that these companies exceed the legal deadline: 33% reported being paid well beyond legal limit (over 90 days), while 41% said payments were slightly over the legal term (between 60 and 90 days). Only 26% of large companies pay within the legal timeframe.
Regarding payments to subcontractors by primary contactors, the study found an average payment period of 88 days. “At PMcM, we have long been denouncing the fact that the payment chain in the public sector is “poorly controlled”, making it difficult for funds to reach the last link (the subcontractors, who are mostly SMEs and self-employed workers) while allowing some large companies to finance themselves at the expense of their suppliers”.
According to Cañete’s view, “significant measures” are urgently needed, such as the initiative announced by the Catalan Government to pay subcontractors directly. This move is expected to ensure faster payments and provide liquidity to businesses.
Persistent abusive clauses
The latest edition of PMcM report on payment terms once again confirms the persistence of abusive clauses. Last year, 61% of suppliers had contracts or commercial agreements with clients (both in the public and private sectors) that imposed payment terms exceeding those allowed by Law 3/2004, “without any consequences being applied to this illegal practice”, states Cañete.
Adding to this concern is the fact that, in cases of late or non-payment, 84% of suppliers never or almost never claim interest from their late-paying clients, and 92% did not claim legal compensations for recovery costs. According to the president of PMcM, “this highlights the ineffectiveness of a law that does not penalise non-compliance”. In this regard, 94% of the respondents in the PMcM analysis consider the introduction of a penalty scheme to be “necessary”.
Based on the results of PMcM’s analysis, the late payment ratio (percentage of unpaid invoices relative to total billing) was 5.2% in 2024, slightly higher than the 5.1% recorded in 2023. Additionally, 74% of participants indicated that they do not expect any changes in their payment terms for 2025. When asked about their first option in case of needing liquidity, 76% stated they would seek financing, while 16% would be forced to extend their payment terms.
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