November 17, 2016

Small Business Cash Flow Crisis

Small Business Cash Flow Crisis In 2014/15, 20,018 businesses in Australia became insolvent, with inadequate cash flow being a key reason. At 30 June 2016, small business owed more than $12 billion in collectable debt, accounting for almost two-thirds of total collectable debt. Evidence shows that businesses which manage their cash flow effectively are more likely to succeed. Despite the large amount of information on cash flow management already available in the market place, it is recognised that cash flow remains a significant issue for small business. The ATO provided the following information on statistics and research: There are more than 2 million small businesses in Australia. The ATO defines a small business entity as a business with less than $2 million aggregated turnover. 96% of all Australia’s businesses are small businesses, producing over $330 billion of our nation’s total economic output. Small businesses employ 4.5 million people, almost half of […]
June 16, 2016

Where’s the cash?

Someone once told me an old adage that remains true to this day: ‘Expenses rise to meet income.’ How often to do you or someone you know has asked the question: ‘Where’s the cash?’ It’s a prevalent question with a multitude of answers. The first things we suggest for people to check are the debtors and ask yourself the following questions: Are they paying on time? Are we invoicing regularly enough? Are they actually receiving our invoices? If the answer is no to any of the above questions, we suggest you apply the ‘If not, why not?’ principle. Why are they not paying on time? Is it lack of cash flow on their end? Make contact with them, suggest a payment plan so that they can at least pay it off incrementally/ If they’re repeat offenders, you might consider a stricter credit policy to deter them from taking advantage of […]