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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.

As the average time taken to settle invoices reaches its highest point in three years, putting SME finances under strain, Scottish Pacific, Australia's largest specialist working capital provider, says there are some quick ways for businesses to improve cash flow.

The latest research from Dun & Bradstreet shows businesses are waiting an extra three days for payment compared to the previous quarter (waiting an average of 56 days in Q1 2014).

The same report indicates Australian businesses feel cash flow is the issue most likely to impact them in the upcoming quarter.

Scottish Pacific CEO Peter Langham said the ability to manage cash flow is crucial to SME success, as is access to working capital.

"As debtor days drag out, cash flow issues will be putting a strain on SMEs," Mr Langham said.

"SMEs need to be looking at big picture issues such as whether they are financing their business in the most effective way, through to smaller, everyday actions they can take to improve cash flow," he said.

 

4 easy ways SMEs can speed up collections

  1. Raise invoices in a timely manner. Issue the invoice as soon as the job is done or goods are despatched. Don't wait until the end of the month.
  2. Make invoices easy to pay. Make sure those responsible for any sales are not responsible for collecting payment. Have two distinct roles within your organization where responsibilities are clear.
  3. Separate sales from debt collection. Most import transactions with China are completed in US dollars. Value fluctuations in AUD versus USD have the potential to seriously harm gross profit margins. To avoid this risk, importers should work with currency providers to set up Forward Exchange Contracts that lock in an exchange rate.
  4. Regularly credit check customers. Don't chase turnover, chase profit - and there's no profit in a sale unless you get paid. Running regular credit checks will improve your likelihood of getting paid, and paid on time.

 

About debtor finance

Over the past 25 years debtor finance has become a mainstream funding option for SMEs in Australia, with the take up accelerating significantly over the past 10 years.

There are currently 4,500 Australian SMEs, with combined annual revenues of $63 billion, using debtor finance (more than 17% are financed by Scottish Pacific).

Debtor finance provides a flexible cash flow facility, similar to an overdraft, but geared to the level of the outstanding invoices and not requiring property security.

Scottish Pacific is Australia's largest specialist provider of debtor finance services. Scottish Pacific's growth for the March 2014 quarter was 18% higher than the corresponding quarter in 2013, and well above the industry average.

For more information contact:
Kathryn Britt
Cicero Communications
Tel: 0414 661 616

About Scottish Pacific
Scottish Pacific Debtor Finance Pty Ltd provides working capital solutions to SMEs, offering the broadest range of trade and debtor finance solutions in Australasia. Established in 1988, Scottish Pacific has full operations centres in Sydney, Melbourne, Perth, Brisbane, Auckland and China.

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