Focus on cashflow or risk becoming a statistic
Figures released by Dun & Bradstreet this week showed 3,000 businesses collapsed in the June quarter, leading experts to urge SMEs to focus on fixing cashflow or risk becoming part of these statistics.
OPS Global Senior Consultant Michael Todd said cashflow need not be so difficult for businesses, if they look at their account management practices.
“We all want to help each other out in times of hardship and recovering debts from unpaid customers can be an embarrassing job, especially when you’re closely connected to your customers.”
“Times of crisis, like the GFC, the floods and the recent stock market crash, put pressure on everyone. If you run a medium-to-high-cost professional services business, like an accountancy or law firm, you are likely to get stung by slow paying clients who are also feeling the strain and if this goes on for too long, it can mean the end of your business as you get months behind in payments worth hundreds of thousands of dollars.”
Todd said many business owners belong to industries that connect them personally with their clients, which means accounting practices carry emotional baggage – and “effective management of invoices and debt recovery can easily fail the most savvy business.”
He suggests businesses look at utilising a service similar to what OPS Global delivers, which assists them to recover current and old debts that weigh on cashflow.
“Our methods are based on psychological and non-confrontational techniques that can really help struggling businesses. Unfortunately if companies don’t act now to regain control of their accounts, they will continue to see the effects of the recent disasters well into 2012.”