Australian business tips

Australian Businesses need to consider today the impact and implications of the global melt down on their business. The most significant issue for businesses today will be cashflow. Any business that has a small number of large debtors (ie customers that owe them money) must ensure they collect these funds from them regularly – that is preferably fortnightly. Just because a business is large does not mean it can not go broke – this has been proven by the number of large corporations that have recently been put in liquidation or administration and once this happens the likely hood of recovery of funds is low.

Look for the warning signs – any slow payments should be followed up directly and discussions held with the debtor to determine their ability to pay. If there is any indication that the customer is in financial difficulty, get your debt secured, look for personal guarantees form directors and owners, ensure they have assets (many businesses execute asset protection methods that can hide assets), consult your accountant for advice on direction to take – even go as far as recommending the debtor seek professional help to rectify their problem – but most of all stop working for them – if they can not pay you now,there is a very high chance they can not pay you later – you are better off without the customer than doing work for someone who will not be able to pay you.

Do not incur large capital investment on customer work without a secure commitment from them that they will and can pay – always ensure there are regular payment schemes in place to cover all costs within short time frames – no later than monthly – and cease work if they do not pay.

If you think you may have some cashflow fluctuations and/or problems – go to your bank today and arrange facilities while things look good – approaching the bank when things are bad is a waste of time and will not help you.

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