For a multitude of reasons, businesses often have weak accounts receivables policies. The result is that despite generating impressive sales figures, the money just isn’t making it through the door and goods and services are effectively being given out for free.
Make no mistake, overdue accounts cost your business money and they can significantly impair cash flow, placing you at risk of being unable to pay your own debts as and when they fall due. Not having sufficient capital on hand can also prevent you from being able to invest in growth opportunities, increase shareholder payouts, upgrade your equipment or expand …
If your business allows clients to purchase products or services now and pay for them later, you are essentially extending them credit, assuming they have the means to pay for the transaction. While this can help to facilitate business, it does leave you wide open to the risk of serious financial loss. For this reason, it is vital that you establish bulletproof terms of sale prior to extending credit to any client.
The terms and conditions in your credit application, together with those appearing on invoices, order forms and your website may all form part of the contractual agreement between you …
When improperly handled, overdue receivable debts can severely impact a business’s ability to stay afloat. Overdue accounts not only cost money to collect, but they mean that cash flow is not available to the business, meaning it itself is at risk of accruing debts that it cannot pay. This is especially so when overdue accounts become long-term or ‘bad’ debts.
When debt ‘collection’ becomes debt ‘recovery’
Effective and consistent debt collection procedures can go a long way to preventing ‘old’ debt. However, even businesses with the most efficient debt collection procedures will end up having to deal …
Working towards owning your own commercial property has many positives, you can:
Pay yourself to ‘rent’ your own space
Customise the building for your needs
Combine functionalities to streamline your process
Expand at your own pace
Sublet areas of your building, and more
However, despite its innocuous title, approaching a commercial mortgage is entirely different from that of a residential mortgage.
So what are the main differences?
Mainly, borrowers need a much larger deposit to secure a commercial property. While residential properties …
Through experience, business owners and operators become naturally attuned to the peaks and flows of the economy. However, when the livelihood of your workers and your family are at stake, it is too great a risk to place complete trust in gut instinct.
So how do business owners and operators plan for and recognise times of growth and recession?
Despite its dense and often complex background, successful businesses will follow the macro “financial cycle” of their environment to inform business decisions and avoid glaring pitfalls.
What is a financial cycle?
Also referred to as business cycles, financial cycles map out the rises and falls …
Every company had debtors, people who owe them money, the last thing we want is for a client to go under or be deemed unable to pay. If a client is going under we should be able to identify if they are and be able to prepare a plan to tackle this. What are the warning signs of a client going under?
Warning Signs of A Business Going Under
Business’s that cut their dividends are experiencing tough times. They may just be experiencing a rough patch but if they are looking to boost revenue …
Increases in late payments of invoices, dishonoured payments and post-dated cheques are all indicators that a debtor may be experiencing financial hardship or possibly headed for insolvency (if they are not there already).
Once a person or company is declared insolvent, their creditors must go through the process of proving their debt in the bankruptcy or liquidation, in order to recover any outstanding monies owed to them and typically only recover a fraction of what they were owed.
So what is a creditor to do? The first inclination of many is to quickly and aggressively recover whatever they …
The small claims procedure is one of the many ways a business or sole trader can recoup money owed through a legally enforceable transaction of goods or services.
Small claims procedure is effective for cases where the:
Claim is for less than $10,000* (*applies to NSW only)
Entitlement being claimed is covered under Australian workplace laws, and the
Statutory time limit has not expired (usually six years from when …
There’s an old adage in the debt collection business that goes a little something like this, “The longer a debt is left outstanding, the harder it is to collect” and never a truer statement has been spoken.
You place your debtors in the “Too hard” pile for difficult collections? What about your final notices, they are ignored? Or your staff spend all the time to improve their debt collection skills instead to generate new revenue? More than these relevant facts, you pay interest on money that is outstanding?
One of the biggest mistakes business owners make is to put off hiring …