Check the cheque

As result, in the past year 23 percent of SMEs wrote off bad debt, 32 percent had customers negotiate to pay in monthly instalments, and 21 percent had difficulty meeting tax payments on time.

Bibby Financial Services Australia director Gary Green says 84 percent of the surveyed SME business owners have put strategies in place to help manage their cash flow.

“Thirty nine percent spent more time chasing invoices, and 21 percent delayed payments to their own suppliers or refused to take on more work until invoices were paid. Not surprisingly, 17 percent of SMEs outsourced their debt collections to lawyer or debt collection company.”

Meanwhile in New Zealand, Lock Finance CEO Simon Thompson, who is also part time consultant to the World Bank, plans to tell meeting organised with Business Mentors New Zealand in Christchurch next week that disorganised invoicing, poor accounting systems and ongoing avoidance of debtor collections are hampering the SME sector’s attempts to tackle its cash flow problems.

According to Lock Finance, business mentors report that managing cash flow is the number one problem facing SMEs. It says businesses struggling with cash flow problems are making life more difficult for themselves by poor paperwork practices.

And Business Mentors NZ CEO Ray Schofield says almost every one of the 250 or so requests received by Business Mentors New Zealand every month will feature to some degree problems with cash flow.

“Of the 60,000 plus SME owners in New Zealand who have sought our help in the last 21 years, around third of them have had serious problems with their cash flow.”

See NZ Management magazine’s upcoming October issue for an article on smart ways to manage cash flow.

Visited 9 times, 1 visit(s) today

Business benefits of privacy

Privacy Week (13-17 May) is a great time to consider the importance of privacy and to help ensure you and your company have good privacy practices in place, writes Privacy

Read More »
Close Search Window