Austria: businesses take hit of substantial write-offs

Write-offs represent an enormous amount of lost sales for the Austrian businesses concerned. This could pose a threat to their survival. Austria: businesses take hit of substantial write-offs This year’s Payment Practices Barometer survey reveals that Austria is working hard to overcome the economic impacts of the pandemic. A few indicators were particularly concerning for businesses. Introduction In line with the other Eurozone countries, Austria’s GDP is expected to reach pre-crisis levels by the end of 2022. Within the overall picture of a country that is working hard to overcome the economic impacts of the pandemic, many of the businesses we spoke to across the industries polled in Austria described their concerns over ongoing pandemic uncertainty and worries that supply-side disruptions could still cast a dark shadow over the country's economic outlook. As further government fiscal support is withdrawn, the first few months of 2022 may prove to be a challenging time for many businesses in Austria, including the risk of key customers entering insolvency. Key takeaways from the report Businesses polled across Austria told us that on average 57% of the total value of their B2B remained unpaid at the due date. This is up from last year's 33%. Write-offs of uncollectable B2B receivables increased almost fourfold, rising to 11% of the total value of B2B sales on credit, up from 3% last year. Interestingly, this increase in poor payments behaviour correlates closely to an increase in the percentage of businesses opting to manage credit risk in-house (70% up from last year's 49%). Businesses that reported in-house credit risk management told us they incurred increased administrative and trade debts collections costs. Looking into 2022, nearly half of the businesses polled in Austria anticipate customer payment practices to remain stable, with 40% expecting deterioration over the coming months. This highly likely reflects concerns over ongoing impacts of the pandemic continuing into next year, adversely affecting the domestic economy and delaying the rebound in some industries. When asked which pandemic-induced changes will become a permanent feature of the way they do business, 59% told us increased use of digital technologies, and 50% said the ability to cope with the pandemic-induced reshaping of the supply chains. Interested in getting to know more? The Payment Practices Barometer report for Austria gives insights into B2B payment practices and businesses' approach to the management of customer credit risk in the following local industries: Agri-food Chemicals Transport For a complete overview, please download the full country report available in the Related documents section below. The Statistical Appendix and regional Payment Practices Barometer survey results are also available free to download. All content on this page is subject to our Disclaimer, available here.