Reducing Cashflow Risk

Poor cash flow management is a leading cause of businesses (both big and small) failing in Australia. It is not only new businesses that encounter cash flow problems, but also ones that have been operating for many years. There are a lot of reasons why a business runs into a cash flow problem. Here are some of the lesser known ones you should keep a lookout for – so you don’t end up another business failure statistic. 1. Assuming because your business is growing that you won’t have cashflow issues It is easy to think that because your business is growing that you don’t have to worry about your cashflow. Unfortunately, this is wrong, as a lot of the time … Continue Reading →

What you can do if a Customer Refuses to Pay

At some point, nearly all small businesses are confronted with a customer who refuses to pay. The work has been done or the goods supplied yet the customer still won’t pay. This can be very stressful for a small business – especially if the amount involved is having an impact on your own cashflow. Given that the work has already been done or the goods delivered what can you do to collect the amount outstanding? Send Reminders If you do not send out your invoices on time with regular reminders it makes it much easier for a customer not to pay. It is also important to remember that a phone call usually has more impact than just sending email reminders. … Continue Reading →

How your Personal Credit Score Affects your Business

It is not commonly known that your personal credit score can affect your ability to secure a business loan as well as other forms of business financing. This is especially true for small businesses that employ less than 20 people. Even if you can secure credit you may be required to pay a higher interest rate due the perceived higher risk or have other obligations placed upon you. So how does your personal credit impact your business and what can you do about it? What is a personal credit score? Your personal credit score relates back to the very first day you applied for credit. For some this may be when you applied for a car loan, moved into an … Continue Reading →

5 Myths Stopping People Hiring Debt Collectors

It is hard to believe but Australia has the reputation of being the slowest in the world at paying outstanding invoices – even worse than Mexico, South Africa and the United Arab Emirates.  Even more surprising, numerous European counties – including Switzerland and Germany- actually pay their invoices early!  The average time it takes for an invoice in Australia to be paid is 26.4 days past the due date. Continual late payment of invoices adds financial and administrative costs, reduces the potential for investment opportunities, damages business relationships and fuels business uncertainty according to various discussion papers published by the Federal Government. So why aren’t Australian businesses ‘taking a stand’ and engaging debt collectors when invoices are overdue? Australian businesses … Continue Reading →

Brodie Credit Control Solutions – manage debtors and improve cash flow

Brodie Credit Control Solutions (“BCCS”), the consulting arm of Brodie Collection Services provide a broad range of services to help you get your debtors under control. This range of services include: 1. Consulting with you on trade terms, processes and debt collection methodologies The best way to keep your cashflow under control is at the  beginning of the sales process  (ie before you provide goods and services and extend credit to a customer). This means making sure you have clear trade terms that are enforceable. If worded correctly it will also mean that you will be able to recover your debt collection costs from the debtor. Carefully worded trade terms also mean that resolving disputes will be easier, making it … Continue Reading →

Get Your Cashflow off to a Good Start in the New Financial Year

cash flow

The period leading up to the financial new year is a good time to review what you have been doing in respect of offering credit to your customers and implement new strategies where required. As a small or medium sized business owner you need to ensure that your interests are protected when you deal with other businesses and that you are paid for the services or products that you provide. If you do not, you may end up one of many businesses who fail due to cash flow problems. The following are 5 quick steps that will set you off in the right direction in the new financial year. By following these tips you will gain more confidence when providing customers with credit: 1. … Continue Reading →

Is Poor Cashflow Management Stopping your Business from Growing

To be able to grow a business, access to reliable cashflow is essential. This means that there is cashflow available for growth initiatives when they arise. Quite often, the window for growing a business is quite narrow, so having the funds available to utilise at short notice gives a business a great advantage over its competitors. However, the reality for many businesses is that they do not have a reliable cashflow. This means that instead of focusing on the growth of their business, the majority of time is spent continually chasing late paying debtors. American Express released a special report in 2016 “Behind the Balance Sheet” that highlights the cost of not managing cash flow. The report found 65% of … Continue Reading →

New Proposal to Tackle Phoenix Companies

phoenix companies

It is estimated that Phoenix Companies cost the Australian economy up to $3.2 billion per year. It is not just businesses who don’t get paid for goods and services but employees often don’t get paid their entitlements, including superannuation. In addition, State Revenue Office and the Australian Taxation Office are left with large amounts of tax debts outstanding. It is a large complex problem which has seen many recommendations over the years but not many changes being implemented. What is a Phoenix Company? A report by PwC Australia in 2012 defined a Phoenix Company to be the deliberate and systematic liquidation of a company with the purpose to fraudulently or illegally: avoid tax and other liabilities, such as employee entitlements; … Continue Reading →

Know when to collect and when to forget a debt

Every day in the news it seems there is another story about a business going ‘bust’. Normally, this is not of much interest to you unless your business is owed money from them.  If you are owed monies from a business that has gone ‘bust’ you may decide it is best just to write off the debt as there is little or no chance of recovery since your debt is most likely unsecured – but before you decide to do this, it is worthwhile to investigate a bit further as there are different ways of going ‘bust’ and some offer a greater chance of recovering your debt than others. The Australian Securities & Investments Commission (ASIC) is a useful starting … Continue Reading →

New Financial Year – time to review your business processes

coins and calculator to show how to get cash flow in the new year

With a new financial year upon us, coupled with further weakness in business conditions being exacerbated by political uncertainty now is the time to review your business processes. It can be frantic at the end of a financial year, which means things, like the collection of outstanding invoices, can slip. But with an estimated $26 billion owed to small businesses in unpaid invoices at any one time it is a recipe for a cash flow crisis if things are allowed to slip for too long. So how can you get back on top of your business processes? 1. Review the credit application forms The first step is to review the credit application forms completed by your customers and make sure they … Continue Reading →