IF YOUR business is waiting longer for invoices to be paid in 2015, you’re not alone.
Australia’s small and medium businesses are being forced to wait longer to be paid on outstanding invoices – especially when dealing with larger companies.
A recent Australian Government survey shows nearly two-thirds of small businesses have invoices that were unpaid for at least 60 days.
The Main Offenders
While companies of all sizes were guilty of stringing-out vendors, larger companies are the slowest paying.
Businesses with 500 or more employees were more likely to delay payment for up to three months.
Why do big companies take so long to pay?
Because they can.
If you’re working with one of these large companies as your only customer, they have the power.
They can go to somebody else, leaving you with little bargaining power.
With competition for clients tough, many small companies are reluctant to appear heavy-handed about payment terms – especially when large customers are involved.
The longer wait is particularly tough on small companies, who might be forced to borrow at expensive rates to fill the gaps in their cash flow.
The slow payments can prevent smaller companies from making investments in research, new employees, better equipment upgrades, and other things that can benefit the company in the long run.
Slow grow – and the consequences of slow growth – postponed hiring and cancelled orders for materials and equipment – spread through the economy.
What to Do
You can’t control business trends, but you can adjust your company’s plans for coping with slow payers.
To get a better handle on your receivables consider the following:
- Invoice finance is becoming the preferred option for many Australian SMEs.
- TIM Finance provides quality short term business financing options for smart businesses
- Obtain immediate cash flow from your unpaid invoices with TIM Finance’s online platform, where multiple SME funders provide the most competitive debtor finance to fund your invoices.
- With no property security and no monthly management or unused facility fees, we believe TIM Finance is simply the most competitive source of single invoice funding in Australia.
- It’s easy to set up, and once you’re established you can usually be paid on your invoices within a few business days.