The credit crunch is biting as the grim economic chill settles over Europe, leaving many private individuals and businesses alike struggling to make ends meet. Ongoing research by Intrum Justitia across Europe shows that for SMEs it has never been more important to get paid – hopefully on time. Get smart fast in getting paid for goods or services delivered or risk being forced out of business.

Financial turmoil, unemployment rocketing to levels not seen for decades, companies folding at record levels and tight credit conditions have boosted fears about domestic and pan-European outlooks. And the true extent of Europe's debt problem is something that few in today's market environment could hazard a guess at.

"Our research shows that anyone today trying to guestimate the real extent of the European debt problem is probably going to get the figure wrong," says Leif Hallberg, Intrum Justitia's Brussels-based Director of European Public Affairs.

Even before the meltdown last autumn, the research showed late payment was costing European businesses a whopping €25 bn, with invoices being paid on average after 55.5 days – or almost four weeks late! European public bodies doggedly remain the worst payers, taking an average of 65 days to pay an invoice compared to 40 days for consumers.

"Many large companies are reportedly concerned about whether their suppliers can get credit enough for continuing to produce and supply. This is all the more reason for such companies - as well as governments and public authorities - to start to pay promptly on due dates instead of jeopardizing the survival of SME's by extending payment duration," Leif Hallberg added.

"Cash flow is a particular problem for small companies during this critical time for the economy, and tackling late payments would do more to help small businesses than loosening lending criteria. It is very important that there is still money flowing towards SME's, which are the most important source of growth and employment creation in the EU."

The core message from Intrum Justitia's is that today's economic challenges can only be countered by creation of good and sustained credit management processes, from prospecting to collecting, and using proven tools and techniques that deliver tangible value.

"Our research shows the lowest payment risks are found in the Nordic countries where there exists readily available addresses and data, regulated structures, fast legal processes for small claims and compensation fees for late payments that are simply not present in most other European Union countries," Leif Hallberg says.

Nonetheless, many businesses, authorities and ordinary people are suffering as a result of the credit squeeze. "My view is that businesses, and especially SME's, need to review their credit situation and bank borrowing lines and without further delay identify their need to outsource credit management to an outside professional CMS facilitator," he says.