Unpaid B2B invoices: seven strategies to reduce payment defaults

Our Register study "Waiting for money" classifies the capital commitment of Austrian companies: with methodology, earnings tables and complete PDF. It expressly distinguishes balance sheet receivables from overdue invoices.

If you run a company in Austria, you know the situation: service provided, invoiced, and then nothing happens at first. The customer does not pay, or later, or only after repeated reminders. While you wait for your money, your own costs continue.

Why do so many B2B invoices remain open?

outstanding invoices are not the exception in business between companies, but the rule. The European Commission estimates the proportion of late paid B2B invoices in Austria at around 40 percent, and the Atradius payment index even measures 44 percent for 2025. For many companies, especially for small and medium-sized ones, this is a liquidity problem with an announcement.

Waiting for overdue money limits your ability to pay suppliers, invest and fund growth. Each reminder and follow-up call also takes working time and attention.

The good news is that payment defaults are not a fate. With the right debtor management, the risk can be significantly reduced. The key lies in two phases: prevention before the bill becomes open at all, and response as soon as it is overdue. The following seven strategies cover both phases.

Prevention: Prevent payment defaults before they occur

The four most effective levers against outstanding invoices reach before the first cent is overdue: conscious payment deadlines, a credit check, an immediate and error-free invoice and automatic payment reminders. Whoever works clean here prevents a large part of the failures without ever having to warn.

1. Set payment terms deliberately

The payment deadline on your invoice is your most important control tool for cash flow, and yet many companies set it without thinking about it. "Payable within 30 days" is standard in Austria. But if your own suppliers set 14-day targets and you grant your customers 30 days, you effectively finance the operation of your customer.

Check whether shorter payment deadlines are possible. 14 days net are common in many industries. Or offer 2 percent discount on payment within 7 days. Many customers like to take the discount with you and you have your money three weeks earlier in the account.

2. Check creditworthiness before the contract is signed

The most effective protection against defaults begins before the first business. A credit check is not a sign of mistrust, but professional risk management. Especially in the case of new business partners or larger order volumes, it should be part of the routine. Information agencies such as the KSV1870 or CRIF often provide corporate credit data for a low double-digit amount, a fraction of what a default costs.

The information agencies mentioned above are active providers of economic information in Austria, as of 2026.

3. Issue accurate invoices promptly

It sounds trivial, but is one of the most common reasons for late payments: the invoice is made too late or faulty. Every day you wait with the invoice is a day your customer pays later. Anyone who invoices on the day of the service will noticeably shorten their days sales outstanding.

These errors delay payments particularly frequently:

• wrong or missing order number, for larger companies a classic
• missing VAT identification number on the invoice
• unclear description of the service
• invoice sent to the wrong department or e-mail address
• no clear payment deadline specified

4. Set up automatic payment reminders

Many bills are not paid too late for evil intent, but because they are lost in the accountancy of the customer. A friendly reminder a few days before maturity often works wonders. Modern accounting software offers this function by default. Set up a fixed rhythm:

• 3 days before maturity: friendly reminder that the bill will be due soon
• 1 day after maturity: First reminder of payment, factually in tone
• 14 days after maturity: second reminder, worded more firmly
• 30 days after maturity: last payment reminder with reference to the next steps

A formally correct first payment reminder with time limit and interest notice generates in a few minutes the Payment reminder generator. Whether there is any need to warn before the collection, the contribution Reminder before collection.

Reaction: If the invoice remains open anyway

If an invoice remains unpaid despite precautions, timely action matters. Three strategies limit the damage: measure and manage days sales outstanding, communicate clear consequences for late payment and involve a collection agency early.

5. Measure and manage days sales outstanding (DSO)

You cannot improve what you do not measure. Days sales outstanding (DSO) is a key receivables metric: it shows how many days customers take to pay on average.

The calculation is simple: outstanding receivables divided by revenue, multiplied by the number of days in the period. If DSO is 45 days and payment terms are 30 days, customers pay 15 days late on average.

Orientation grids for B2B companies. The meaningful bandwidth depends on industry and payment deadlines.

6. Communicating Clear Consequences in Late Payment

Many companies are afraid to address the consequences of late payments to customers. This is not a sign of hostility, but of professionalism. Anyone who makes clear from the outset what happens in the event of late payments is less likely to face defaulting payers.

Three points belong in your communication and best in your terms and conditions:

• that there are statutory late-payment interest between companies 9.2 percentage points above the base rate; currently around 12 percent per year
• that a statutory flat fee of 40 euros per claim is charged
• that after a fixed period a licensed debt collection agency takes over

The exact rate of interest of a concrete invoice is calculated by the Late-payment interest calculator in a minute. The interest rates between companies and how you apply them correctly, explains the Guide to late-payment interest in B2B.

7. Involve a professional debt collection provider early

If internal measures do not work, professional collection is the logical next step, and he should come earlier than many think. The most common mistake is waiting: companies send reminders for reminders and hope that the customer still pays. During this time, the recovery rate decreases.

Modern collection service providers in Austria work digitally and transparently. At incaseof.law you can Debt collection services and hand over your claim in a few minutes, without contract and without minimum volume. You can always see where your case is. The institution's remuneration is borne by the defaulting debtor, your principal claim remains 100 percent with you. What this costs is transparent on the page Debt collection costs.

Companies that engage in debt collection no later than 60 days after maturity achieve on average a noticeably higher recovery rate than those that only trade after half a year. The reason is simple: accessibility, solvency and evidence become worse with each month.

What do outstanding invoices really cost?

outstanding invoices cost more than the pure invoice amount. Time, lost interest, an increasing risk of default and the psychological burden quickly add up to a multiple of the actual receivables.

Four hidden cost blocks appear again and again:

• Time. Every reminder, every phone call, every reminder costs working time. With an internal hourly rate of 50 euros, this is quickly several hundred euros per case.
• Opportunity costs. Money missing from your account cannot be reinvested. You may miss early-payment discounts from suppliers or need more expensive financing.
• Rising risk. The longer an invoice is open, the higher the risk of a total loss. After six months, the probability of a full payment decreases significantly.
• Psychological stress. outstanding claims burden, especially if the personal relationship with the customer is good and you don't dare to stay tough.

This is precisely why every day that a bill is paid earlier is worth it. The 194.9 billion euros are the sum of many individual outstanding invoices, and each of them was once young and well-received.

Checklist: seven steps for managing receivables

The seven strategies can be translated into a simple checklist. Those who process these points reduce their risk of failure in prevention and response alike.

• Set shorter payment deadlines and discount incentives for the money to arrive earlier
• Check creditworthiness of new customers before the order
• Invoices immediately and error-free, ideally on the day of performance
• Set up automatic payment reminders so that nothing goes wrong
• measure and keep an eye on the DSO
• communicate clear consequences in case of delay, in writing in the GTC
• Instruct a debt collection agency early instead of waiting for months

For an initial invoice reminder, handling it yourself makes sense. If a second reminder receives no response, a licensed collection agency is usually more economical. incaseof.law is licensed in Austria and Germany, its model has been confirmed by the Supreme Court and you retain 100% of the principal. For the handover process, see How debt collection works, if a Customer permanently not paid, find the next steps there.

This guide explains the management of debtors in Austria in general and does not replace advice in individual cases. State of the cited figures and standards: July 2026.