Polish IT sector sees 13% rise in client payment delays, threatening software houses

Payment delays from clients to the Polish IT sector have increased by 13% over the past 12 months, reaching a total amount of nearly PLN 0.5 billion. According to data from the National Debt Register of the Economic Information Bureau (KRD), the debt of business partners to the technology sector increased by PLN 56 million during this period. The most difficult situation concerns entities involved in software development, which have PLN 428.9 million to recover from their clients. Although the IT industry shows signs of recovery, growing payment gridlocks constitute a significant barrier to its further development and financial stability.

The main source of financial liquidity problems in the IT sector remains the specific project settlement model, where payments are made only after acceptance of individual work stages. This contract structure means IT companies often effectively extend credit to their clients while waiting for formal acceptance of tasks. Adam Łącki, President of the Management Board of KRD BIG S.A., points to the disproportion between the debts the industry must recover and its own arrears. Although the debt of IT firms themselves also increased, the scale of this phenomenon is much smaller and amounted to just under PLN 21 million in the past year, indicating relatively high payment discipline among IT companies compared to their clients.

This situation forces technology companies to adopt a more restrictive approach to verifying business partners even before signing a contract. The National Debt Register Economic Information Bureau S.A. has been operating on the Polish market since August 4, 2003, as the first private economic information bureau. This institution monitors the payment reliability of business entities, and its reports often reflect the condition of the entire economy. In the past, the IT industry was considered one of the safest sectors, but the global economic slowdown and changes in company marketing and investment budgets have impacted payment term extensions. Experts predict that the continuing upward trend in client debt may lead to consolidation of smaller software houses that do not have sufficient capital reserves to cover multi-month delays in transfers.

Debt dynamics in the IT sector: Increase in client debt: 56, Increase in IT firm debt: 21