Late payments are causing significant cashflow headaches for business. Research shows, on average, small businesses in Australia are paid 6.4 days late, costing them $1.1 billion per year as a result.
It means business owners themselves are coming under more pressure with monthly obligations to pay their rent, power, and supplier invoices despite the fact that cash they are owed is not delivered on time.
dmca Associate Director Ricardo Neves says it is a growing problem, but recognising the red flags early is important for business owners.
“Working with people who do not pay your bills on time requires action.
“First, perhaps evaluate if a potential new client or customer is likely to pay your bills before you take them on. Credit checks can be important in some cases. We also recommend using a systematic invoicing approach using software platforms like Xero or others that can speed up invoice generation and therefore ensure faster payments.
“You also need to look across the business and recognise when and where you are being paid late on a regular basis and to chase that up.
“Finally, there are a number of government programs that can offer some assistance for non-payments, and it is worth finding out about these to see if you might qualify.”
A professional business adviser can assist you to develop the technology and processes to get your cashflow, invoice management, and forward business planning back under control. Just ask us for details.