” THE GOVERNMENT HAS TO STOP COVERING UP OUR EMPLOYMENT CRISIS AND START FIXING THIS BEFORE IT GETS ANY WORSE” – Owen Bennett, President of AUWU
“WE SHOULD BE THANKFUL THAT PAYING INVOICES INS’T AN OLYMPIC SPORT – BECAUSE AUSTRALIA WOULD FINISH DEAD LAST” – Kathy Anderson, HUFFPOST
We’ve all struggled with growth.
Every financial ‘guru’ has a sure-fire method or bag of tricks they are eager to sell you. But these can be loaded with danger, and when applied to business fundamentals like cash flow, can prove potentially disastrous to the business’s future. One piece of misinformation often peddled is that business owners should make late payments to suppliers in order to improve your fluidity.
While ostensibly true, this is in fact wrong—very wrong.
According to the OmniPay CEO Christian Luckow, paying suppliers earlier is hugely beneficial towards the overall health of a business. This is because it allows you to take advantage of incentives and discounts, while helping you to cultivate rapport with your suppliers.
In a perfect world, our clients pay us immediately and we pass on the favour to our suppliers. However, the reality of business is that we can’t dictate when our customers are going to pay us. As such, we need more money to stay afloat, which in turn means a reduction in costs or raising of prices. But what if you can’t do that?
The Harvard Business Review says the solution is simple: “If you can’t reduce costs or raise prices, speeding up your cash flow is the way to grow your business.” Some SMEs that take a serious interest in their growth projections have already discovered the way to smash their goals is by taking advantage of invoice finance. Great news for them.
A recent study by The Invoice Market found that Aussie businesses have $76B tied up in unpaid invoices and a further 2 million businesses are seriously struggling with unpaid bills. In addition to this, a report by ASIC illustrates that poor cash flow is to blame for 40% of business failures. If these statistics were properly addressed, half a million jobs could be salvaged, significantly reducing the number of unemployed and under-employed Australians.
Unfortunately, the type of funding that could help these small businesses still remains largely unattainable, as average SMEs are unaware of other more suitable options such as Invoice Finance. Another great way to prevent business failure and deepening unemployment is to stop handing the security of SMEs over to big banks as collateral for loans by promoting the perks of other ‘less risky’ products to small business owners.
Educating business owners on the benefits of utilising readily available debt-free finance has significant rewards:
- Invoice Finance allows small businesses to receive payment within 24-48 hours, on invoices that might otherwise sit as unpaid liabilities on the balance sheet for anywhere between 30 – 90 days.
- Financed invoices are assets on small business’s ledgers, meaning these businesses have access to funding without creating debt. This helps small businesses maintain good credit ratings providing them with capital to grow, innovative, create new jobs and boost the Aussie economy.
I’ll leave you with this:
“ALMOST HALF A MILLION SMALL AND MEDIUM SIZED BUSINESSES SAY THEY WOULD EMPLOY MORE PEOPLE IF THEY COULD IMPROVE THEIR CASH FLOW POSITION, REDUCING AUSTRALIA’S 715,000 UNEMPLOYMENT QUEUE TO 200,000 PEOPLE OR FEWER” – The Invoice Market CEO, Angus Sedgwick (STATISTICS FROM THE INVOICE MARKET’S CASH FLOW CRISIS REPORT)
Author: Bill Sparksman – for further information about Invoice Finance contact firstname.lastname@example.org or visit www.compareloanz.com
Author: Bill Sparksman – Website Link: https://www.linkedin.com/pulse/11-reasons-why-smart-recruiters-laughing-all-way-bank-bill-sparksman/Read More