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There's nothing worse for a business looking to expand than not having the required working capital on hand to take advantage of market conditions and push for growth.
This could be as simple as hiring more people, or it may well be moving into new premises that have enough space for all the extra production or equipment you're planning on buying. When that is limited by customers not paying their invoices for work you've already spent money on to complete, it can be frustrating to say the least.
As a solution to this issue, Earlypay offers invoice finance, which means it takes on responsibility of unpaid invoices and provides your business with a percentage of what those are worth. This cash injection is a fantastic option for rapid expansion, and can also be necessary for people to pay their employees on time, or clear their own invoices.
However, a media release from SmartCompany on May 12 suggests calls are being made for payment times to decrease dramatically, to ensure SMEs are supported. The Council of Small Business of Australia (COSBOA) is asking why there isn't more being done to cut the payment times that many small businesses are experiencing.
How long does it take to be paid?
According to Dun and Bradstreet Australia, invoice payment times at the end of 2015 were at an record-low of 44.1 days. While that seems like a long time, and it's a far cry from the 57 days SMEs were experiencing at the end of 2008.
Even so, 44.1 days is significantly longer than a month, and that means for that entire time, your organisation won't be paid for the work it has already completed. COSBOA is calling for this sort of thing to come to an end, so small business finance can be more stable.
Earlier in 2016, SmartCompany revealed that Woolworths supermarket chain was taking up to 60 days to pay its invoices, while at the same time demanding that its own customers pay theirs within just 30 days. COSBOA wants a code of conduct to be set in place by the government.
"There are times when you can't pay [on time], but what we want from government is to get it going," said Peter Strong, chief executive of COSBOA.
"It should be an industry-run, voluntary code. Coles and [Woolworths] will have to sign up and pay on time, otherwise why bother?"
Would a code such as the one COSBOA are calling for help your business to succeed? And would invoice finance make a difference to your growth prospects, even if payment times fell?
Contact Earlypay today to find out more about its financial services solutions that could help you.