In economically challenging times, the issue of securing liquidity is becoming increasingly important for companies. Sound financial planning, a continuous overview of cash flows and securing cash flow at an early stage are crucial in order to avoid financial bottlenecks and prevent insolvency. This comprehensive guide is designed to help companies in Austria optimize their cash flows and secure cash flow in the long term. We shed light on legal aspects and provide practical tips on how to proceed effectively at all levels of securing liquidity. Here are our 5 strategies<\/p>\n<\/div>
Cash flow refers to the cash flow, i.e. the difference between incoming and outgoing payments in a specific period. Cash flow shows how much money is actually available to a company to pay running costs such as rent, salaries, taxes and supplier invoices. A healthy cash flow means stability and is the basis for investment, growth and financial security. Maintaining a positive cash flow is particularly important for small and medium-sized enterprises (SMEs). A stable cash flow protects against financial bottlenecks and minimizes the risk of insolvency. Even economically healthy companies can get into payment difficulties if they do not collect their receivables on time and their capital therefore remains tied up on the debtor side.<\/p>\n<\/div><\/div><\/div><\/div><\/div>
To avoid cash flow bottlenecks, it is important to take a preventative approach and establish processes to secure cash flows. Below we present measures that companies can take to secure cash flow and minimize liquidity risks.<\/p>\n<\/div><\/div><\/div>
A) Early and timely invoicing<\/p>\n<\/div>
Timely invoicing is the first and one of the most important steps to ensure prompt payment. Frequent errors, such as sending invoices late or providing inaccurate information, result in payments arriving late or not being received at all.<\/p>\n<\/div>
Our tip:<\/strong> Beware of errors:<\/strong> B) Clear and transparent terms of payment<\/p>\n<\/div> Clear and precise payment terms create transparency and help to avoid misunderstandings. These terms should be detailed in every contract and on every invoice.<\/p>\n<\/div> Standardized payment terms:<\/strong> Early payment discounts:<\/strong> Early payment incentives (e.g. cash discounts) can be an effective way of motivating customers to pay their invoices more quickly. However, customers do not have a general right to deduct a discount.<\/p>\n<\/div><\/li><\/ul><\/div><\/div> C) Dunning and deadline monitoring<\/p>\n<\/div> The dunning process is a critical area in the company to ensure cash flow. Qualified and reliable employees should be entrusted with this task. Effective dunning processes ensure that late payments are tracked and collected in a timely manner.<\/p>\n<\/div> Create a dunning plan:<\/strong> Automated dunning process: D) Handover to the lawyer<\/p>\n<\/div> If a debt remains unpaid despite repeated reminders, it may make sense to hand the matter over to a lawyer. A professional debt collection procedure shows the debtor that the claim is being pursued seriously and can increase the pressure.<\/p>\n<\/div>
\nEstablish clear internal processes to issue invoices as soon as possible, either before or immediately after the service is provided. Automated invoicing systems or accounting software can help to simplify and speed up the invoicing process.<\/p>\n<\/div><\/li><\/ul>
\nMake sure that payment deadlines, invoice amount and VAT are stated correctly, as incomplete or incorrect invoices delay the payment process.<\/p>\n<\/div><\/li><\/ul><\/div><\/div>
\nIn Austria, a maximum payment term of 30 days is customary by law, unless otherwise agreed. However, companies can also agree shorter terms with their customers. It is important that these are clearly communicated in advance.<\/p>\n<\/div><\/li><\/ul>
\nA structured dunning process with clearly defined dunning levels (e.g. payment reminder, first reminder, second reminder) is crucial. Each dunning level should include a fixed interval and a clearly defined procedure.<\/p>\n<\/div><\/li><\/ul>
\n<\/strong> Numerous accounting programs offer the option of creating and sending reminders automatically as soon as the payment deadline has passed. This saves time and minimizes the risk of losing track of payments.<\/p>\n<\/div><\/li><\/ul><\/div><\/div>