Delayed invoice payment will be a significant problem for Australian small and medium enterprises (SMEs) in the current financial year.
The Australian Bureau of Statistics (ABS) reports that uncertainty about economic conditions, supply chain issues, high material costs, and limited access to additional funds are some of the factors affecting general business activity.
These factors contribute to slower invoice payments, with small businesses experiencing more severe impacts on their cash flow compared to larger operations.
Nick McGrath, CEO of Moneytech, said these conditions are strangling SMEs.
“Our internal research shows SME customers chasing invoice payments to maintain cash flow as their main business concern prior to seeking finance products.”
SME operators, who already accept lengthy payment terms of 90 to 120 days, are now facing even longer waiting times due to delayed invoice payments.
With 15 per cent of businesses already reported to have sought debt or equity finance, McGrath said that if a businesses’ cash is tied up in outstanding invoices, debtor finance helps free up cash by supplying 100 per cent of invoices as soon as they are raised for payment.
“Debtor finance can be used for better cash flow management, realising the full value of customer invoices, paying salaries, paying suppliers, and investing in growth opportunities. Moneytech’s straightforward, simplified approach to business lending ensures customers can invest in their businesses’ growth and development.”
McGrath advises businesses to assess their finances, reassess their strategic plan, and utilise a sustainable cash flow option in order to alleviate slow invoice payment pressure.
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