Payment risk

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In the economy, payment risk is the risk that a client / importer / buyer ( debtor ) cannot meet his payment obligations , not fully or late.

General

Are exposed to payment risk contractors / exporters / seller ( creditor ) when goods or services not - as in the purchase agreement usual - train to train to be paid by the debtor. The terms of payment can instead stipulate that the debtor only has to make payment after delivery, i.e. that he is given a payment term . This payment term represents a supplier credit that manifests itself through a payment risk. The further this payment term is postponed, the higher the payment risk. The core of the payment risk is the risk of payment defaults by the debtor.

Legal issues

In the case of the purchase contract, the buyer is obliged to pay the seller the agreed purchase price in accordance with Section 433 (2) BGB and to accept the purchased item. In the case of a work contract , this obligation results from Section 631 (1) BGB. The specific due date of the debtor's payment results from the terms of payment (for example "10 working days after delivery", "Payment due date : December 15, 2018").

Foreign trade

The supplier credit ( English supplier credit ) is to export credit if the supplier with the importer a payment time limit has agreed; A letter of credit or document collection , on the other hand, is not a supplier credit . The payment risk increases - outside of the EU member states - in the event of contact abroad by the country risk , which consists of an exchange rate risk , transfer stop risk and a moratorium risk ( payment ban ). The exporter then not only bears the importer's credit risk , but must also take into account the political / economic situation in the importer's country. Also, force majeure can contribute to the development of a payment risk.

economic aspects

Receivables entail a credit risk for the obligee , as a result of which they are subject to an impairment which is evident from a loss of receivables . Examples of this are:

The debtor does not meet his obligation to pay.
  • Information about the client's financial difficulties:
The supplier can use certain information systems (in Germany e.g. bank information , Schufa ) to obtain information by means of which he can assess whether the debtor has not or not fully met a claim in the past.
Insolvency proceedings (in Austria: bankruptcy ) are the situations in which the customer can no longer meet his payment obligation to a supplier.

If there are indications for a value adjustment , the claim is no longer valuable and must be corrected accordingly, i.e. H. the claim will be reduced by the amount that is likely to fail. The degree of collectibility of a claim will have to be examined more closely in the case of doubtful claims . The debtor status provides information on whether and to what extent a bad debt loss is to be expected. The latent bad debt risk is countered with general bad debt allowances , specific bad debt risks are taken into account by individual bad debt allowances .

Receivables management

Within risk management , receivables management ensures that trade receivables are continuously monitored. Ongoing monitoring takes place, for example, by means of credit checks or external checks by rating agencies . The risk of payment default can be reduced or, in the event of default, sold. The payment risk is reduced by checking the creditworthiness before signing the contract. A debtor rating that gives the debtors a rating according to their collectability is worthwhile wherever the stock of receivables makes up a high proportion of a creditor's balance sheet total .

Risk management

The payment risk can be eliminated through risk management . Possible measures are:

It serves to hedge against bad debts from the delivery of goods, services and work in the event of the debtor's insolvency . The scope of insurance includes the failure of one or all of the creditor's claims with the insurance company. As a rule, the credit insurance companies carry out an assessment and assessment of the risk of the claim, based on which the insurance premium is based. Depending on the risk, the premium can be relatively high, which means that it is often only worthwhile if a single claim is a threat to the company's existence.
If the importer cannot provide payment security, export credit insurance with a focus on credit insurance is possible.
The terms of payment can stipulate that the debtor provides a payment guarantee from a credit institution or an insurer . The payment risk is eliminated by means of a letter of credit or document collection.
The most frequently used contractual security means is prepayment by down payment or prepayment . In this case, the delivery or the service only takes place if the business partner has made the payment in advance.
If a reservation of title is agreed, the seller remains the owner even after delivery until the final payment of the goods. This type of contract offers protection, especially in the event of bankruptcy.
In the event of a transfer of ownership by way of security for the seller, items belonging to the security provider are transferred to the seller. As a rule, the items can remain with the customer if he is economically dependent on them.
If the creditor also has liabilities to his debtors, he can offset these by way of clearing or netting . This means that his payment risk disappears in the amount of his liabilities.

In addition, receivables can also be sold ( factoring , forfaiting ) if they contain a financial risk . Here a company sells its claims against its customers to another company (factor). The claim then belongs to the factor who asserts it to the end customer when it is due . With the sale, the seller's financial risk has disappeared.

Finance

Under a payment or settlement risk ( English settlement risk ) will finance the risk understood that the settlement with counterparties in a payment system does not take place or value exchange system as expected.

Individual evidence

  1. ^ Jörn Altmann, Außenwirtschaft für Firmen , 1993, p. 727
  2. ↑ Martin Czerweny-Arland / Martin Verdenich, Modernes Cash-Management , 2008, p. 38
  3. ↑ Grit S. Becker / Oliver Everling, Debitorenrating , 2010, p. 45
  4. ^ Stefan Hirschmann / Frank Romeike, Credit Insurance: Interface between Banks and Companies , 2005, p. 6
  5. ↑ Dieter Hoppen, Sales Management , 1999, p. 292
  6. ↑ Jörg Wöltje, ABC of Finance and Accounting - Best of Edition , 2010, p. 210
  7. ^ A b Hans Pfeifer, My personal security: I need to know that, Karlsruhe 2004, ISBN 3-89952-044-0 .
  8. ↑ Heinz Duthel, Basel I, II, III - Capital - Credit Risk / Lending , 2013, p. 132
  9. ↑ Bank for International Settlements, Payment Systems in the Countries of the Group of Ten , 1995, p. 551