Timely payments can make or break small businesses from a financial perspective. After all, modestly-sized entities simply don't have the freedom to allow consumers, suppliers and any other applicable party the ability to miss payments regularly.
If that does indeed end up being the case, it can make it difficult for the company to meet its own obligations, and cash flow can suffer as a result. However, are enough Australian organisations effectively chasing outstanding funds with an eye on keeping their small business accounting well rounded?
The burden of unpaid invoices
Well, research collated by Intuit and Paypal suggested that a plethora of Australia's small and medium-sized enterprises (SMEs) have invoices outstanding to the grand total of some $26 billion. In their 'Late Payments Study', the two companies found that the average amount customers owed to SMEs is $13,200.
Perhaps even more shockingly, around 25 per cent of those entities that are owed money were seeking other methods of financial support in order to ensure that their operations remain afloat.
Rather than just a burden on company capital, the research also went on to surmise that small businesses are having their time sucked away by chasing up consumers who owe money. In total, the average enterprise owner spends 12 working days each year pursuing unpaid invoices.
Starting a fight back
So, what can business owners do to buck these trends? Well, a good starting point is to ensure that the company is using professional accounting services and documenting finances correctly.
Moreover, at present, only 12 per cent of Australian small businesses require funds for services up front. Becoming part of that figure is key for those enterprise figureheads who want to better keep track of their finances, and generally ensure that cash flow remains satisfactory.