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Employment up, sales down: How invoice and payroll factoring helps

04 March 2015

In the ever-evolving world of business, there are few constants. Fortunately, Dun and Bradstreet's (D&B) latest predictions into the second quarter of 2015 helps us to gain some insight into what is changing - and what challenges lie ahead for a business owner.

Released on February 3, D&B's Business Expectations Survey shows that the outlook has cooled somewhat, with sales and investments falling after a hectic summer period.

However, it's not all necessarily bad news, especially for a savvy manager, owner or executive with a plan for growth.

Sales and profits down

In many ways, a fall in sales and profits after Christmas is expected - as an annual event, it is a trend that many are prepared for.

However, Q1 was a 10-year high in terms of sales - reaching 38.7 points on D&B's index score system - and the fall this quarter to 33.6 points is slightly steeper than it was in the previous year.

Profit expectations, too proved to dip below last year's figures, as they fell by 5.5 points to 20.4 for Q2 2015, while the same period in 2014 stood at 20.7.

"The healthy optimism that was recorded for the first quarter of year appears to have dissipated amid uncertainty about near-term economic growth and an unsettled operating environment," explained D&B CEO Gareth Jones.

Looking past this upcoming quarter, though, a third of businesses say they expect higher profits in the three months after, with only 13 per cent expecting lower earnings.

Capitalising on past successes

Some businesses may struggle to reap the rewards of the first quarter after a hectic Christmas month. It is telling about the way we take payments that many will still be awaiting invoice settlements from their customers way into the second quarter.

If this is an issue for you, and remains an area that restricts your growth, invoice finance is an ideal way to boost earnings in a difficult quarter - without running the risk of taking on debt or putting personal assets up for collateral.

Employment rising

D&B also found that many companies, despite dipping revenue, have high hopes for recruitment in the coming quarter.

Employment expectations rose for the seventh consecutive quarter in this latest survey, rising to 23.0 points - an increase from both the last quarter (16.1) and the same period in 2014 (9.2).

Such an offset between capital and recruitment plans can cause discord to cash flow. Payroll finance works to limit this effect, helping employers take on new members of staff even when their invoices are left outstanding and their income restricted.

Good times ahead

Despite the lower Q2 forecasts, Mr Jones said business in Australia remained in a good position.

"While the Business Expectations Survey reveals that forward-looking expectations have softened, they do remain above their 10-year average. In addition, the actual performance reported by businesses for the end of 2014 was strong," he added.

If you are looking to grow this year, but are held back by low investment and slow debtor payments, contact earlypay for a quick and clear solution.