Chapter 7 : Webinar on short-time work (in Austria)

For many companies, short-time work is one of the ways to cope with the liquidity shortages caused by lost revenue, supply chain bottlenecks, compliance with Corona protection measures and much more.

More than ever, entrepreneurs and managing directors face numerous and major challenges. They are confronted with the difficult task of putting their companies on a stable footing in a period with numerous but unknown variables.

For many Austrian companies, short-time work is one of the ways to cope with the liquidity shortages caused by lost revenue, supply chain bottlenecks, compliance with Corona protection measures and much more.

So can (Austrian) companies really afford short-time work?

Helga Krachler and Manuela Rott took a closer look at the effects of short-time work using an example and plotted the associated “cash flows” on a timeline running to June 2020.

The key factor in this calculation is the double salary payments that are usually paid out in June.
The holiday allowance is calculated on the basis of the pay BEFORE short-time work.
It should also be noted that it is not yet entirely clear when the short-time work contribution from the AMS will be paid (beginning of April 2020).
Many companies suffer massive drops in revenue in the period from April to June – some of up to 100%. It remains to be seen how quickly revenue will rise again after a gradual reopening.
Incoming payments on outstanding customer invoices will take longer rather than shorter. The risk of defaults has to be reviewed and assessed continuously.
Stock levels may have been built up before the crisis in order to avoid supply shortages around Easter. A full warehouse has to be financed.
Negotiations with suppliers about payment terms, deferrals or possible changes to contracts only take effect with a delay.

A company whose liquidity position was already tight at the start of the “lockdown” can therefore quickly find itself in a precarious situation, up to and including the risk of insolvency!

In precisely such a situation it is important to run through all the possible scenarios internally and to visualise the effects on cash flow for the coming months. Only in that way can new sources of income, potential cost savings and financing options be identified that you may not even have thought of so far.

Manuela Rott used “Commitly” as the tool for cash flow planning:

With Commitly cash flow planning, a timely presentation and continuous updating of the income and expenditure already recorded and of the funds available is possible at the push of a button.
Commitly makes it quick and easy to record and adapt planned income and expenditure on a weekly and monthly basis.
It is self-explanatory to use and makes it possible to focus on the substance.
Condensing the data ensures the overview. Talks with the bank, with investors and/or with funding bodies quickly lead to the desired result and to the necessary decisions.
Detailed questions about particular income or expenditure categories can easily be answered, because the underlying details are made transparent by simply clicking and drilling down, so that you keep an eye on everything.

To answer the question of whether Austrian companies can afford short-time work, Manuela Rott and Helga Krachler, together with Edith Neudhart, present the following 5-point check:

Get your figures in order It is important to have a complete and correct set of data available in good time.
Consider alternative and/or new sources of income One of the opportunities of the COVID-19 crisis is to offer new products and services on the market and to run through various scenarios internally and check them for feasibility.
Assess your situation realistically The Corona crisis brings numerous uncertainties with it. That makes it all the more important to have clarity about the liquid funds available and – depending on the scenario – about how cash flow will develop, together with the respective probability of that scenario occurring.
Calculate, calculate, calculate! You need to check how large the financing requirement is and which additional financing aid and subsidies are available in order to keep the effects of the Corona crisis on your company as small as possible.
Get professional support A critical view from the outside and recommendations for immediate measures give entrepreneurs and managing directors time to concentrate on other essential matters.

Disclaimer: The content of this mailing and of the video serves general information purposes only. It constitutes neither legal, accounting, tax nor any other professional information, recommendation or advice. The content is not intended to serve as a basis for decisions and is not suitable for that purpose. In particular, the content cannot replace individual advice from qualified people that takes account of the specific circumstances of the individual case. The content was compiled with due care. Nevertheless we accept no liability whatsoever, on whatever legal grounds, for its accuracy, currency and/or completeness. The people named are members of a network. Every member of this network is an independent legal entity

Helga Kracher

The future of work, corporate strategy, HR controlling and the culture of failure are part of Helga Krachler’s consulting portfolio. Make use of her knowledge in these areas as well as in temporary staffing, employment law, change management including insolvency proceedings, and career planning and development.

Manuela Rott

We know the everyday working life of managing directors, finance managers and entrepreneurs from our own experience at international companies and NGOs.

We support digital transformation. Automating processes, connecting data and presenting it in real time, and getting teams ready for new challenges.