Why Successful Businesses Use Invoice Discounting

by Brad on May 18, 2012

In today’s uncertain economic climate many of Australia’s SMEs are still facing difficult times. Generating consistent income is a real challenge with low business confidence in the economy, greater competition, less loyalty and price cutting all having an adverse effect on revenues. As a result, many businesses face an uncertain future not knowing whether they have the funds to pay their taxes, bills, or worse, payroll. This is one good reason why plenty of companies are looking to solutions such as invoice discounting.

A small business, in particular, must have consistent cash to survive, or else every time customers do not pay on time, their bills also begin to pile up in the process. There are many options to consider in trying to overcome or conquer these challenges, and Invoice Discounting is one. Invoice Discounting has become an increasingly popular way of generating working capital to meet day to operating expenses as well as fund growth. No longer is it considered a facility of last resort, it is now considered a genuine alternative to bank overdraft. Continue reading →

How to measure cash in your business

by Brad on March 4, 2012

Every business needs cash reserves to pay their bills and expenses on time. It is vital to balance the timing and amount of money flowing in and out of your business daily, weekly and monthly. While this may seem fundamental to some, it is surprising how often experienced people miscalculate the required level of cash reserves.

‘Cash’ is the amount of money immediately available to your business – including coins, notes, money in your bank account, any unused overdraft facility and foreign currency and deposits that can be quickly converted into your currency. Continue reading →

Is a bank overdraft right for you?

by Brad on November 2, 2011

While many businesses prefer a bank overdraft there are many disadvantages.

Many think it is set and forget, however if the business is growing it may have to be rearranged regularly, incurring new set up fees. Perhaps during the term of the facility.
It is “at call” and they can be called in by the lender at any time.
You face administration fees if you exceed the agreed limit.
Overdrafts are normally secured against business assets – the lender can take control of these if you don’t repay the overdraft.
You can only get an overdraft from the bank where you maintain your current account. In order to get an overdraft elsewhere you need to transfer your business bank account.
The interest rate applied is nearly always variable, making it difficult to accurately calculate your borrowing costs. Continue reading →

Australian Small Businesses Still Face Uncertain Future

by Brad on September 9, 2011

While the government is talking up our economy, in relation to global economic conditions, the reality is that the SME market is experiencing some of the most difficult conditions on record.

However, the uncertainty surrounding the looming carbon tax and our political scene has sent business confidence plummeting. The downturn in the retail sector is well documented and manufacturing is shrinking at the fastest pace in two years.

Nearly 3000 businesses ceased trading in the June quarter and some economic analysts are predicting as many as 10,000 small businesses may fold as consumers and businesses stop spending. Continue reading →

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