Blog Articles2018-07-30T00:36:09+00:00

Blog Articles

Reducing Cashflow Risk

Poor cash flow management is a leading cause of businesses (both big and small) failing in Australia. It is not only new businesses that encounter cash flow problems, but also ones that have been operating for many years. There are a lot of reasons why a business runs into a cash flow problem. Here are some of the lesser known ones you should keep a lookout for – so [...]

What you can do if a Customer Refuses to Pay

At some point, nearly all small businesses are confronted with a customer who refuses to pay. The work has been done or the goods supplied yet the customer still won’t pay. This can be very stressful for a small business – especially if the amount involved is having an impact on your own cashflow. Given that the work has already been done or the goods delivered what can you [...]

How your Personal Credit Score affects your business

It is not commonly known that your personal credit score can affect your ability to secure a business loan as well as other forms of business financing. This is especially true for small businesses that employ less than 20 people. Even if you can secure credit you may be required to pay a higher interest rate due the perceived higher risk or have other obligations placed upon you. So [...]

5 myths stopping people hiring debt collectors

It is hard to believe but Australia has the reputation of being the slowest in the world at paying outstanding invoices - even worse than Mexico, South Africa and the United Arab Emirates. Even more surprising, numerous European counties - including Switzerland and Germany- actually pay their invoices early! The average time it takes for an invoice in Australia to be paid is 26.4 days past the due date. [...]

Get your cashflow off to a good start in the new Financial Year

The period leading up to the financial new year is a good time to review what you have been doing in respect of offering credit to your customers and implement new strategies where required. As a small or medium sized business owner you need to ensure that your interests are protected when you deal with other businesses and that you are paid for the services or products that you provide. [...]

Is poor cashflow management stopping your business from growing?

To be able to grow a business, access to reliable cashflow is essential. This means that there is cashflow available for growth initiatives when they arise. Quite often, the window for growing a business is quite narrow, so having the funds available to utilise at short notice gives a business a great advantage over its competitors. However, the reality for many businesses is that they do not have a [...]

New Proposal to Tackle Phoenix Companies

It is estimated that Phoenix Companies cost the Australian economy up to $3.2 billion per year. It is not just businesses who don’t get paid for goods and services but employees often don’t get paid their entitlements, including superannuation. In addition, State Revenue Office and the Australian Taxation Office are left with large amounts of tax debts outstanding. It is a large complex problem which has seen many recommendations [...]

Know when to collect and when to forget a debt

Every day in the news it seems there is another story about a business going ‘bust’. Normally, this is not of much interest to you unless your business is owed money from them.  If you are owed monies from a business that has gone ‘bust’ you may decide it is best just to write off the debt as there is little or no chance of recovery since your debt [...]

New Financial Year – time to review your business processes

With a new financial year upon us, coupled with further weakness in business conditions being exacerbated by political uncertainty now is the time to review your business processes. It can be frantic at the end of a financial year, which means things, like the collection of outstanding invoices, can slip. But with an estimated $26 billion owed to small businesses in unpaid invoices at any one time it is [...]

REDUCING BAD DEBTS – How to protect your business

Offering Credit Terms is essentially providing finance, often on an unsecured basis - what can you do to protect your business? It takes a lot of hard work to generate sales, but it's equally important to make sure sales are converted into actual revenue that flows into your bank account. As a business, you should always be aware and make informed and careful decisions when dealing with other companies. [...]

Why Record Keeping is Essential to Successfully Collecting Debts

Record keeping is not one of the most exciting topics but good record keeping can make the difference between getting paid or not. By keeping good records it will most likely make it easier for a dispute to be settled promptly – this is especially important as the longer a debt remains outstanding the greater the likelihood that you will either not get paid or be required to take [...]

What is the real cost of a bad debt?

It is a common scenario. You have tried to chase a debt but are getting to a point where you think it might be easier to just write it off. You think to yourself there is no point in wasting more time - so you make the decision to 'cut your losses' and just write the debt off. But did you know the actual cost of a debt is [...]

Bad Business Practices that can cost you dearly

Our blogs often focus on tips to help you collect debts owing by your customers. For example, simply by calling a customer, rather than sending an email, increases your chances of receiving payment. In addition, if you have a policy of verifying credit applications and personal guarantees forms then you can make a more informed decision about the risks involved in extending credit to a customer – so you [...]

Personal Guarantees – Make Sure They Are Verified

The following real life example illustrates why you should always get your credit application forms and personal guarantees verified before you extend credit to a customers. It also illustrates why you should engage a debt collector even when you think it is unlikely that the amount can be recovered. 1. The Facts In this real life example a client asked us to assist with the recovery of an outstanding [...]

Be Wary of Extending Credit to Parent Companies

The following illustrates why a business has to always be careful before extending credit to customers. It is always better to turn business down than to extend credit and not receive payment for your products and services. Losing a customer because you have refused to provide credit may impact the growth of your business but not receiving payment for your products and services may cause your business to fail. [...]

Five Steps to Getting Paid More Quickly

Is your business growing but you are still under constant cash flow pressure? If so, it means that you haven’t got your cash flow under control. If you do not keep on top of your cash flow it will have a serious impact on your business – and even cause it to fail in extreme cases. Here are five tips to help you get paid 1. Make it easy [...]

How to Run Out of Cash in Five Easy Steps

Even the most successful of businesses can run into cash flow problems. This is why sometimes you need to take a step back and work out what you could be doing better. There is a lot of information on the internet about cash flow on the Commonwealth Bank website. The following are five common ‘traps’ that businesses can fall into that can lead them to running out of cash. [...]

Know when NOT to provide credit

It can be easy to provide credit. You can be swayed thinking that your new customer is going to be one of your best – so really is there that much risk in providing them some credit? You have crosschecked the credit application against an ASIC search and there are no discrepancies - so what could go wrong? You find out 6 months later, when you are at risk [...]

5 Steps to get your Cashflow off to a good start in the New Year

Given that most businesses fail due to cashflow problems, the New Year is a good time to review what you have been doing in respect of offering credit to your customers and implement new strategies where required. As a small business owner you need to ensure that your interests are protected when you deal other businesses and that you are paid for the services or products that you provide. [...]

How to Catch a Liar

When providing credit to a customer you must always be alert to try and avoid problems later on. It is imperative that you seek out as much detail as you can to make an informed decision about whether to issue credit. For small businesses in particular, even just one customer not paying can cause significant cash flow problems. Getting all your customers to complete credit application forms is a [...]

Tips for managing your cash flow over Christmas

Unless you are in retail, Christmas can be one of the most challenging times for small businesses in terms of their cash flow. To survive small businesses need to start planning now to make sure they do not have to wait until February before they get paid for work done in November. Here are some tips to survive the Christmas cash flow crunch:  1. Plan Make sure that you [...]

Quick steps to improve your cashflow

When you are busy growing your business it can be difficult to keep on top of everything. However, if you don’t keep on top of your cashflow, it will have a serious impact on your business – and in extreme cases can even cause it to fail. You know that you need to spend time to get your processes and procedures in place – but you are just too [...]

Debtor Rights – What you need to know before you start chasing customers!

You are busy trying to recover a long outstanding debt from a customer – but are you aware that there are debtor rights guidelines issued jointly by The Australian Competition & Consumer Commission (ACCC) and the Australian Securities & Investments Commission (ASIC) about how you can go about collecting it? The debtor rights guidelines explain how Consumer Protection Laws apply to both debt collectors and businesses who seek to [...]

ASIC Searches – what you need to know

There is an old saying that prevention is better than cure. This definitely applies when you are making the decision about whether to provide a credit facility to a new customer.  If you take the time to find out more background information about your new customer you can prevent a lot of stress later.  The last thing you need is for any customer to turn into a bad debtor. [...]

The Essentials of Credit Application Forms

It might sound familiar.  You are busy growing your business. You get a new customer (the biggest one yet). They place a large order and promise to pay you within 30 days. Six months later you are still chasing the debt and all your focus has been taken away from growing your business. It has become a struggle to stay afloat and pay your own creditors. At this stage [...]

Legal Action – Understanding the Process

You tried to recover the debt yourself. You then engaged a professional debt collection firm without success. The amount owing is large, so you are not sure whether to give up or keep going - and if you keep going what is the next step? If you do decide to keep going the next step is to commence formal legal proceedings. If you have not been involved in taking [...]

5 Steps to Getting Paid

Is your business struggling with its cash flow even though sales are up? Maybe you need to get more organised. It is estimated that it takes the average customer 53 days to pay an invoice and nearly 60% of all invoices are getting paid late. It is unfortunate, but some customers will take advantage of a business that is disorganised and not pay you until they are chased for [...]

The Process of Legal Recovery

Legal recovery is when legal action is taken over an outstanding debt, there are a number of steps involved and it is important to understand this process. The initial steps by a lawyer are to instigate legal recovery proceedings in the form of a complaint against the company as the first defendant, with the director as guarantor as the second defendant. The complaint is usually filed in the Magistrates’ [...]

Importance of an ASIC business name search and company search

If you are doing business with small to medium sized companies and providing them with a credit facility of anywhere between $5,000 to $150,000, then an ASIC business name search and company search is extremely important. We will discuss steps you can take to reduce the risks of being swindled by corrupt operators and unreliable directors due to their limited personal experience. This article is not personal advice, simply [...]

Strong credit control leads to recovery of debt

Considerable care should go into the structure and layout detail of your company “Credit Account Application and Agreement” and “Applicant’s Guarantee”, as poorly prepared credit control may result in future bad debt and inability to recover. The same applies to poor office procedure and control for inspection of returned applications, as selective filling out of detail by the applicant can result in the loss of future debt recovery. This [...]

Avoiding Bad Debtors – ASIC Company Searches

As a business you must always be aware and make informed and careful decisions when dealing with other companies. This is particularly important when providing credit facility on the sale of goods and services. This article is not personal advice, simply a discussion paper on the topic. Parent or Holding Companies and Credit A situation to be aware of is when a trading company seeking credit from you is [...]

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