Despite being heavily burdened by high inflation, Austrians continue to have good payment practices. Only one in six invoices is paid late. In some cases, the public sector is even transferring money faster than in the previous year. What is less good is that those who need a debt collection agency are becoming younger and younger.
“The mood in the economy is not picking up,” explains Ricardo-José Vybiral, head of KSV1870. Only slightly less than every second (48 percent) of companies that work with us classify their business situation as ‘good’ or ‘very good’. More than a quarter (27 percent) speak of declining turnover, according to a survey by KSV1870. Retail remains a problem child: only one in three companies is doing ‘well’ or ‘very well’.
It is therefore all the more pleasant that payment behavior remains high. On average, private individuals pay their bills after 13 days, municipalities after 24 days and companies after 25 days. The federal government pays after 35 days (+1 day compared to last year). Countries improved by two days to 31 and municipalities by one to 24 days.
Nearly nine out of ten private individuals pay on time
Private individuals pay their bills on time in 87 percent of the cases. However, they are clearly holding back consumer spending. Every second entrepreneur (51 percent) notes that private households are purchasing less compared to the previous year. The construction sector and retail are particularly affected. “Private consumption is essential to experience a thriving economy again,” Vybiral explains.
However, collecting the funds is more difficult
Even when morale is good, costs for companies rise. 46 percent say it has become more difficult to get private individuals to pay. It is said that people often wait until the “last minute” and maximize the payment terms.
Debtors are getting younger and younger
However, the development of the age structure is not very encouraging. “Debtors are getting younger and younger,” emphasizes Walter Koch, Managing Director of KSV1870 Receivables Management GmbH. Nearly a quarter (24 percent) of all debt collectors are between 21 and 30 years old. Two years ago that was only 23 percent. The increase is even more striking among young people under the age of 20. While this group only accounted for 0.8 percent of all debtors in 2022, this is currently an impressive three percent – more than a threefold increase in two years.
Demands for the future government
“The companies have given us something, a list of demands with their wishes for the new government,” Vybiral explains. In addition to classics, there are also new topics, the credit protector emphasizes. Here’s an overview:
- Reduction or reduction of additional wage costs
- Reduction of bureaucracy
- Less taxes and more lighting
- “Work must be worthwhile again,” and unemployment benefits must be urgently reformed.
- Energy costs must be reduced so that companies can be (internationally) competitive again.
- Targeted support for SMEs
- Comprehensive education reform
It will be interesting to see which of these demands will be implemented by a future administration.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
