Payment delays and bankruptcies are the biggest worry for chief financial officers

Even before Covid-19, payment delays and bankruptcies were the main concerns of European finance directors, while lost sales and cyber attacks are additional challenges. In this context of risk management, the role of credit insurance is becoming increasingly important.

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There is nothing that European CFOs fear more than late payments or bankruptcies of their customers. From the CFO’s point of view, even cyber risks lag behind the two main risks, followed by difficulties in supply chains, declining sales and profitability. This is the result of the current study “DNA of a CFO” from the credit insurance company Acredia in collaboration with Euler Hermes.

When it comes to what’s making a quick, tangible impact on businesses, late customer payments are high on the list of concerns. “Even before the Covid-19 pandemic, almost every second company surveyed was affected by payment delays and almost every third was affected by the bankruptcy of a customer,” says Acredia board member Gudrun Meierschitz. “That is a relatively frightening result and shows the great snowball effects that bankruptcies can trigger in the entire supply chain. After the outbreak of the Covid-19 pandemic, two-thirds were affected by payment delays. “

After payment delays (47 percent) and bankruptcies (32 percent), the European chief financial officers worried before Covid-19 above all about cyber attacks (30 percent). “Almost a third of the companies surveyed were victims of a cyber attack in the past year,” says Meierschitz.

Credit insurance: protective mask for the economy

After the outbreak of the Covid 19 pandemic, 61 percent of European companies were particularly marked by declines in sales between March and May 2020, compared to only 25 percent in 2019. “In public life we ​​have kept our distance since the outbreak of the pandemic. In the economy, it is now a matter of moving closer together, working in networks and using credit insurance like a protective mask and stabilizing supply chains, ”said Ludwig Mertes, Acredia Board Member.

Acredia hopes to find a quick solution in order to keep the situation stable Framework conditions for Austria as a business location to accomplish. “This is about enabling and securing Austrian business, sales and jobs as well as maintaining supply chains,” said Mertes.

For example, Germany is likely to come through the crisis better than many other countries. “In addition to the better initial situation and the shorter, less strict lockdown, the main reasons for this are the quick and very extensive immediate measures taken by the German government. In particular, the joint protective shield of the federal government and credit insurers for German companies has initially stabilized trade and additionally protected supply chains, ”Mertes continues.

When solving the upcoming challenges, the chief financial officers of the companies surveyed then concentrate primarily on planning security and the strictest possible internal risk management. They rely on greater diversification and protection solutions, such as credit insurance. The Acredia experts are convinced that their role will become more important.

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