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SP 30yr AUS

Update: The Australian and New Zealand operations of Bibby Financial Services were acquired by Scottish Pacific Business Finance in late 2015 to create Australia’s largest non-bank invoice finance specialist. Welcome to our website.

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Recent Scottish Pacific Business Finance posts

Keeping the Cash Flowing

Keeping the Cash Flowing

“There’s just too much month left at the end of the cash”

...is a quote from a delegate at a Scottish Pacific Conference a couple of years ago.

But why is this the case for some businesses? And what can be done about it?

Many businesses have had the cash available to them reduced as a result of not being able to maintain or increase their working capital facilities. Security values have been regularly reviewed by the banks and this has seen facilities reduced or in some cases withdrawn altogether.

Bringing the cash in more quickly

Some businesses have responded by looking to improve their 'debtor days' - the average time taken by customers to pay invoices. A business turning over $10M and bringing debtor days in from 60 to 55 days achieves a cash inflow in excess of $135,000 as a result.

So how do they go about improving their debtor days?

Quite often an improvement in paperwork, making sure invoices show all the relevant information required by the customer to make payment will speed up the collections cycle. Sending timely reminders and accurate statements will also speed up payment.

At Scottish Pacific we stress upon our clients the importance of making sure their paperwork is in order and on average our clients are paid 8 days earlier than the national average quoted by Dun and Bradstreet in their latest quarterly payments report.

Keeping hold of the cash longer

Negotiating with key suppliers to extend payment terms, if successful, can have a similar positive effect on cash flow.

Smarter buying and selling

Business owners should regularly ask themselves if they really need to carry that much stock? Managing stock to keep the optimum levels, dependent upon the turnover of the different lines and taking deposits on large orders is another smart tactic used to boost cash flow.

A further option is to re-structure borrowings, removing the reliance on real estate security by taking out facilities such as debtor finance, where the funding available is linked to the turnover of the business. Import finance is another working capital tool which provides capital to bridge the gap between paying your suppliers and getting paid by your customers.

The old adage "Turnover is vanity, profit is sanity, cash is reality" has never been more relevant.

If you have clients who are wrestling with cash flow issues, we would be delighted to talk about how Scottish Pacific might be able to help them.

Happiness is a positive cash flow!

To find out more about how Scottish Pacific can help your business, please visit our services page.

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