How do you get to your money faster - minimize default risk

LBG Austria - Summary: Companies often pay in advance for their customers, as services provided are billed only after they have been rendered and the customer is also granted a payment term. However, this means for the company that it usually has to finance the period between delivery or service provision and the receipt of payment on its own bank account. Here are some tips on how to keep this time span as short as possible and minimize your default risk: 

• Selection of Business Partners and Contract Design: At the beginning of the business relationship, and subsequently depending on the occasion from time to time, information about the creditworthiness and payment behaviour of the customer should be obtained. In the assignment is to pay attention to a precise agreement of the terms of payment (possibly with retention of title). By agreeing down payments, the payment flow can be designed according to the service provision and a default risk can be reduced. 
• Invoicing: Invoices should be sent (electronically) as soon as possible upon delivery or end of service provision. Queries due to unclear phrasing in invoices not only costs expensive working hours, but also delays the receipt of payment. 
• Payment Reminders: Reminders should be timely, clearly formulated and reach the customer with exact deadlines. Active calling in the form of professionally conducted remand talks is often more effective than multilevel written reminder letters.

We also recommend implementing clear standards ("billing and reminder policy") in the company:

• When is the company billed? Who is responsible for that?
• In the accounting software, credit limits, dunning levels, standardized dunning letters and a strict dunning cycle should always be recorded and their adherence strictly observed.

Thereby you reduce your default risk, create liquidity and a fair cooperation to secure the sustainable success of your company.

We check your current invoicing and dunning system and support you in the organizational optimization in the company. If you outsource your accounting to us and we agree on a timely (digital) document flow, we will also gladly integrate a professional periodic dunning process for you.

Contact & Advice: This information naturally shows basic aspects of the topic - for completeness and correctness no guarantee can be given despite careful preparation. LBG will gladly advise you in your individual situation. Please contact one of our 31 Austria-wide locations (www.lbg.at) or welcome@lbg.at - we will gladly bring you together with one of our experts, who is very familiar with your request.