Payment practices report

November 2020: Businesses express confidence in 2021 domestic economy

Survey results for Austria

The Atradius Payment Practices Barometer is an annual survey that assesses business payment behaviour throughout the world. The survey explores a range of topics including payment terms, payment delays, credit sales and DSO (Days Sales Outstanding).

The survey provides us with the opportunity to hear directly from businesses and, this year, gives us insight into how businesses are coping with the COVID-19 pandemic and global recession.

In this report, you will find the survey results for Austria.

Franz Maier,

Managing Director Austria, Hungary and Southeastern Europe of Atradius, commented on the report

Although slightly down on last year, most businesses in Austria have continued with fairly liberal credit policies in order to maintain their competitiveness, particularly within the domestic market. This approach, along with strong credit management techniques, is serving business and the domestic economy well during these difficult times. The proportion of late payments in Austria is much lower than the majority of countries in the region.

Two fifths of businesses have told us they intend to use credit insurance next year. The majority however, about half of those polled, intend to protect their accounts receivable by asking for payment in cash. Much remains uncertain about the economy next year, largely because there are so many unknowns concerning the virus. However, should businesses wish to extend more credit to increase their competitive edge, they would benefit from protecting their ledgers with credit insurance.

Key takeaways

Most businesses offer credit in a bid to remain competitive 47% of respondents told us they accepted requests for trade credit to remain competitive. This is much higher than the 29% that reported the same at regional level.

A third of pandemic invoices are overdue Although the proportion of overdue invoices has increased to 33% in Austria, this is still well below the 47% average of total value of overdue invoices for Europe.

Stalling cash flow hits almost half of businesses 49% of respondents reported cash flow difficulties following start of the pandemic economic crisis, higher than the 38% average for Western Europe.

Businesses benefit from a wide range of credit assessment techniques Unlike most of the other countries surveyed, businesses in Austria had been using a wide range of credit information sources prior to the pandemic and plan to continue.

Looking to 2021 presents picture of business uncertainty Businesses are divided about the outlook for their customers’ 2021 credit quality over the coming months and the future of international trade.

Despite some signs of stress, most businesses are well-placed to weather storms

The H2 insolvency results for Austria in 2020 painted a strong picture, with Austria experiencing among the lowest levels of insolvency increases in the region. This tallies with the results of the Payment Practices Barometer survey where metrics such as the amount of overdue invoices and write-offs was much lower than their regional peers. Despite the strength of these indicators, however, a significant proportion of survey respondents told us they has experienced cash flow difficulties following the onset of the pandemic and the ensuing recession.

49% of respondents reported cash flow difficulties following start of the economic crisis, higher than the 38% average for the region. Perhaps the strongest message to glean from Austria’s results, therefore, is that there is no room for complacency. That despite reporting comparatively strong payments results, business performance can still be negatively impacted.

This is a message that businesses in Austria do appear to be hearing as significant numbers are adopting strong credit management techniques to protect their accounts receivables next year. This includes two fifths of businesses who plan to use trade credit insurance and half who will increase requests for payment in cash. The next six months and, in particular, the nature of the ongoing virus will be critical for businesses health. For Austria, however, business is in a fairly strong position to weather the pandemic storms and this can be seen in the majority who expressed confidence in the domestic economy.

Austria: top 5 challenges to business profitability in 2021

If you have any questions about protecting your receivables send us a message so we can try and address your specific needs.

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