Boosting speedy payments for better cashflow
Small business owners will be well-aware of how essential a healthy cashflow is to the smooth running of the organisation, especially since lower-scale companies that do not have the resources to ride out late payment from their debtors. As such, it’s essential for small businesses to have effective strategies to manage their cashflow in order to ensure they can continue to operate competitively.
With Australian small business associations calling for the government to push for prompter payments to smaller companies, this may prove to be positive progress for small business cashflow when paired with efficiency software to help manage it.
Late payments can leave small businesses struggling for cash.
Demand for more prompt payments for small businesses
Late payments have been a significant issue for small businesses for a long time, with larger corporations sometimes taking months to pay their smaller-scale clients. As a result, The Council of Small Business of Australia (COSBOA) is asking government politicians to establish a voluntary code of conduct that will encourage organisations to pay their debtors on time.
This may be an attempt to reignite discussion around the prompt payment protocol that was discussed by the Labor government in 2013. The principles of this protocol include clear communication, the adoption of a complaint resolution process, establishing positive business relationships, and on time payments.
“There are times when you can’t pay [on time], but what we want from government is to get it going,” COSBOA Chief Executive Peter Strong told SmartCompany.
He argues that the most important aspect of the code of is that it will recognise the good conduct of participating businesses.
“We want to change the culture [around prompt payments]. It will take time, but we want those who aren’t a good payer to not necessarily get an automatic stamp of approval,” said Mr Strong.
Managing your invoices and cashflow efficiently
If it gains support, this protocol is likely to be very beneficial for the finances of small businesses. However, effective cashflow management depends not only on speedy payments, but on the overall efficiency of billing and payroll administration.
One of the most practical ways to improve this is by embracing productivity software that helps client invoicing to be done with ease. Small businesses should look for a configurable application that can be customised based on their specific brand and needs.
With a streamlined system and improved business-to-business payments, small companies will be well on their way to a robust and streamlined cashflow.