Management errors were the main cause of insolvencies in 2022

Management errors were the main cause of insolvencies in 2022
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The KSV1870 announced in a broadcast that planning weaknesses and faulty controlling as well as a poor cost structure due to deficiencies within the organization were the biggest problem areas. Just behind the management errors followed “uncontrollable circumstances” such as illness, natural disasters or especially the pandemic as a trigger for bankruptcies.

The Credit Protection Association of 1870 attributes more than one in five insolvencies out of 2,200 corporate insolvencies in 2022 to the corona pandemic. In Salzburg, Vorarlberg and Lower Austria, this factor even accounted for around a third of all insolvencies. Karl-Heinz Götze, insolvency manager at KSV1870, pointed out in the broadcast that management errors have led to more insolvencies than the pandemic.

“Foundation errors” contributed to another fifth of the insolvencies, i.e. a lack of industry-specific knowledge and business management inexperience, too little capital or the “absence of any suitability to run a company”.

Personal fault was the cause of 12.2 percent of insolvencies last year; in 2021 it was 14.8 percent. The most common cause in this category was management neglect. In contrast, criminal offenses fell from 6.9 percent to 4 percent in 2022 compared to the previous year.

Source: Nachrichten

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