How does your Cashflow Forecast look?
Many businesses are continuing to experience tough economic times, and as a result it-s taking longer and longer for businesses to get paid - especially those operating in challenging industries such as mining and mining services, manufacturing and retail.
You must ask yourself: what are you doing to bolster the strength and competitiveness of your business?
Many of us get caught in the trap of extending credit terms to cover the gap created when customers aren't paying their bills with the view that we'll get paid 'one day'.
In many cases, this response just doesn't cut it. You need to ask yourself:
- What are your payment terms?
- Are they being met?
- Do you know what your debtor days are?
- How does your cashflow forecast look if you allow another 5 days for payment?
- Do you even have a cashflow forecast?
Not acting on outstanding debts means your funding gap widens. In turn, you will need more and more working capital to cover operational costs and keep your business going, or you'll end up in financial trouble yourself.
If this sounds familiar to you and your business, it's time to call in the debt.
Don't know where to start? Contact Chad Russell in Newcastle or any of our locations around Australia to discuss your options.