Austrian firms undergo from unhealthy cost practices

Tight financial coverage and financial uncertainty in current months are placing Austrian firms below a variety of strain. In consequence, cost practices within the B2B business proceed to deteriorate.

Late funds

In line with the Austrian present cost habits barometer 2024 from the worldwide credit score insurer Atradius (see data field), the proportion of late funds in all invoices between prospects and suppliers within the enterprise space rose from 44 to 55 % final yr. “These numbers underline the urgency of strategic credit score administration for firms and, above all, in acquiring liquidity,” stated Franz Maier, Common Director of Austria , Hungary and Southeast Europe, at Atradius.

The proportion of unhealthy money owed within the B2B sector rose from 4 to 9 % in 2023. One other indicator of the issues within the Austrian economic system is the worth of DSO (Particular Days Gross sales, common days of quantities): At 80 %, most Austrian firms from the development and metal/metallic industries reported a decline. The common receipts time was 85 or 74 days from the bill date. Within the transport sector, the place 60 per cent of firms recorded a decline in accounts receivable over the previous twelve months, the typical assortment time is 65 days.

54 % of the 210 firms surveyed by Atradius are ready longer to pay their invoices. “The affect for the affected firms is a delay in funding, a decline in funds to their very own suppliers and difficulties in assembly monetary obligations,” stated Maier. In line with the research, different penalties ‘ together with speedy money stream issues and delays in paying payments and salaries.

Securing liquidity

The lengthy ready instances for funds from B2B prospects improve the necessity for firms to take care of liquidity to safe continued operations. Final yr, firms within the development and transport sectors particularly represented financial institution loans as the primary supply of financing, as they permit investments in technical developments. However, 38 % of metal and metallic firms stated that that they had used commerce credit, ie traces of credit score that suppliers give their prospects to settle their money owed, as their important supply of financing.

In line with the survey, nonetheless, 35 % opted for bill financing. Within the final twelve months, financial institution loans had been a very powerful sources of financing for 61 % of the businesses surveyed and commerce credit score for 28 %. 22 % paid for the supply on account and 18 % paid their invoices with money readily available.

future imaginative and prescient

The Atradius research makes it clear that there is no such thing as a enchancment in cost habits in sight. The surveyed firms are involved within the brief, medium and long run because of persistently excessive inflation, geopolitical tensions and buyer acquisition challenges. “Almost half of firms in all sectors count on cost habits to say no,” stated Franz Maier. Final yr the quantity was twelve %. The vast majority of firms in Austria additionally assumed that they’d have problem discovering certified workers within the coming months, which in the long run, on the one hand, may have an effect on productiveness and, alternatively, stop them from connecting with new applied sciences.

The worry of an rising variety of firm bankruptcies can be rising. 80 % count on an elevated threat of chapter within the B2B business. “This reveals the good concern in regards to the market and the financial scenario that firms will face,” he stated.

This unfavourable evaluation is especially clear within the Austrian development sector, the place 64 % of firms count on the cost habits of B2B prospects to lower within the subsequent twelve months. Nonetheless, the metal/metallic business is anticipated to enhance.

Interval of excellent debt

The totally different expectations from firms concerning the effectiveness of debt assortment and money stream administration are clear within the survey. 56 % of the Austrian firms surveyed count on issues to worsen, whereas the remaining are extra optimistic or unsure.

78 % of development firms count on their backlog to extend within the subsequent twelve months. This displays elevated concern in regards to the threat of monetary instability, particularly amongst firms that depend on immediate funds to take care of their operations. 70 % of firms within the transport sector present related expectations and likewise count on a major decline within the interval of excellent debt. In distinction, nearly all of firms within the Austrian metal/metallic business count on an enchancment or no change in DSO, suggesting stability within the cost assortment. “The research highlights the necessity for firms to develop efficient credit score administration methods to fulfill the challenges of the approaching months,” says Atradius CEO Austria Maier.

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