Impact of COVID-19 on the French economy

By Julien Proust - Chief Business Development Officer, Order To Cash/TCM France | Sep 29, 2020

The first balance sheet indicators

The impact of COVID-19 is beginning to significantly affect the balance sheets of companies in all countries. But what about France?

A few indicators:

Days Sales Outstanding (DSO)

Measured using the DSO indicator, payment terms, after several years of reduction in France, should be extended by 2 days this year, to 72 days. It is more than the world average (currently 66 days).

Days Inventory Outstanding (DIO)

Inventory will also be heavily affected. Assessed by the DIO indicator, it is expected to increase by 3 days in France in 2020, after having already increased by 1 day in 2019.

Working Capital Requirements (WCR)

Finally, the logical consequence of the increase in the first two indicators is an increase in WCR. In France, the WCR of companies are expected to increase by 3 days, to reach 69 days. In comparison, on a global scale, WCR are expected to increase by more than 5 days in 2020, to 74 days.

Bankruptcies to be announced

After a grace period of five months granted by the government, there is no longer any respite for companies that cannot pay their suppliers.

Indeed, in the middle of the health crisis, the French government decided that, until 24 August, the payment difficulties of companies would be assessed in view of what these were on 12 March.

Thus, since the end of August, companies that can no longer pay their invoices now have 45 days to declare that they have stopped payments to the commercial court.

It is therefore the end of the protective bubble for companies. It should be noted that this French initiative has also been observed in other European countries.

An increase in the bankruptcies of French companies is therefore expected in the coming weeks.

Impact of COVID-19 on collection: About Order To Cash

Order To Cash is essentially a very flexible company that has adapted perfectly to this situation, in orderto meet the demands of our customers and thus ensure the continuity of our collection business.

In this period of slow economy, we found various and multiple situations at collection level:

– For individuals, the debtors were, given the lockdown measures, more present at their homes. Telephone calls were therefore the preferred approach.

– For companies, accounting services were sometimes very difficult to reach, but some still proved to be available because they were perhaps less solicited than usual.

– However, for fully closed companies, the only solution was to wait for reopening and therefore additional deadlines with new repayment schedules were negotiated.

Furthermore, the closure of the courts has stopped all our legal proceedings. The resumption of judicial activity at the court level is therefore being carried out gradually, but remains somewhat disparate depending on the specific court. Today, we are witnessing a return to normal with different deadlines depending on the specific court.

If you have any questions visit our website –

Sources are « Les Échos » And « Euler Herrmès »

TCM Group Global Debt Collection
Julien Proust - Chief Business Development Officer
Order To Cash/TCM France

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