Every business owner I’ve met understands the importance of settling invoices in a timely manner, especially at the end of the calendar year. Repaying suppliers, authorities and associations aren’t just important for keeping the company’s books in good shape, they are also essential for maintaining the reputation of the business.
Recently, I came across a new report from Dun & Bradstreet that covered end-of-year payment times in Australia. The results certainly gave me hope for the finances of the country’s SMEs.
Ending 2015 with a bang
Apparently, according to Dun & Bradstreet, businesses Down Under settled invoices at a record rate during the last quarter of 2015. Organisations set a scorching pace of 44.1 days on average, an improvement over the 45.1 days of the previous quarter. When compared to a year ago, it’s a total of six days faster.
Interestingly, Dun & Bradstreet noted that this impressive result comes following the Reserve Bank’s decision in December to leave the cash rate at 2.0 per cent for the seventh month in a row.
Prompt payments, happy clients
The number of businesses settling invoices in 1-30 days also climbed during the final quarter of the year, with the total reaching 68 per cent. A number of businesses, chose to pay bills within the longer 31-60 day period.
Economic Advisor to Dun & Bradstreet, Stephen Koukoulas, explained the fall in payment times in the business sector shows that firms are not only cashed up, but confident about their financial position.
“The record low interest rates set by the RBA are freeing up cash flow and lowering borrowing costs and underpinning a strong performance for corporate Australia.”
Is time on your side?
As many of you will know all too well, time is a constant issue in a business. It’s a premium resource, and like money, it needs to be spent correctly in order to stay profitable and growing. More capable financial software can help businesses to recover lost time, both by overhauling dated processes and cutting down on the chance of errors.
If you’re concerned that your financial system could be hampering your growth, it may be time to start thinking about utilising more capable financial software solutions. Get in touch with me and the team if you’d like to learn more.
