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What can the Panama Papers teach you about having a sound financial footing?

10 May 2016

This year has seen a number of scandals broken already - and it's only April! The Panama Papers, as the latest investigation has been dubbed, has uncovered some very serious information, and many businesspeople have been outed as having potentially shady offshore accounts located in Panama.

Three years ago, an unidentified employee from Mossack Fonseca, the Panamanian law firm at the centre of this furore, leaked 11.5 million documents to the International Consortium of Investigative Journalists (ICIJ) who have recently released their findings. World leaders have been affected, as have many businesses. But avoiding tax isn't the best way to save money, and it's certainly not  the moral option.

Morality aside, can your business have secure enough finances without the need for dodgy dealings? Earlypay's invoice finance solution can help to provide your SME with a boost of working capital, which means that dealing with offshore bank accounts is not necessary.

But how has this news affected the world?

World leaders with nothing to hide?

High-profile world leaders have been outed in the scandal, such as David Cameron and China's President Xi Jinping, Vladimir Putin and the Icelandic Prime Minister Sigmundur Gunnlaugsson, who has resigned on the back of being questioned.

David Cameron has since been as transparent as possible with his involvement, and has even offered to publicise his tax return documents to show the required payments related to the offshore accounts in his father's name. Mr Cameron also had an account in his and his wife's name, but his father owned this fund. Even with this transparency, many people are still calling for his resignation, and mounting pressures might just cause this to eventuate.

Shady dealings don't do anything for public opinion, and this concept doesn't stop with world leaders. Businesses are also being scrutinised left, right and centre, and if something such as the Panama Papers becomes public knowledge and shines poorly on your company, would customers continue using your services? Our guess is not. So, what should you do instead? If money is tight every now and then, look at the more publicly accepted options, and take out invoice finance with a trusted provider such as Earlypay.

What you should do in times of financial difficulty

We can't stress enough how important keeping your books balanced as well as above board is for the continued success of your SME. But there will undoubtedly be times when something hits the red, clients aren't paying their invoices and unexpected expenses pop up out of nowhere.

We have the perfect solution to these - and it starts with taking control of your unpaid invoices.

When clients don't pay you for the work you do, it can be immensely frustrating. Not only have you completed what you were asked to, or delivered the right amount of product, they might make you wait for over a month to see payment come through. In fact, Dun and Bradstreet Australia suggest that the average number of days it takes a business to get around to paying their invoices is 44.1 days. This figure might be well down on the 2009 number of approximately 57 days, but it's still a huge amount of time to have to wait.

Your employees need to be paid, rents need to be met and something as simple as the milk for coffees needs to be restocked. When money is tight in a business, these things don't happen, and that can lead to a lack of productivity for one thing. Invoice finance gives your SME a cash injection while taking over the unpaid invoices, so you can keep up with your own bills and not have to rely on your clients fulfilling their end of the bargain.

Don't go down the same slippery route as those world leaders and businesses that have opened dodgy offshore accounts like the ones outlined in the Panama Papers. Talk to Earlypay today and do the right thing by your company and your country.