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Does big business owe you money?

18/11/2016

1 Comment

 
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Well it appears that big business owes quite a lot to small business.  $26 billion lots to be precise!  That’s how much money is owed to small business in Australia now.  It’s an average of $13,600 in unpaid invoices, which is sending many of us broke, not to mention the stress its causing.  A quarter of all businesses our Small Business Ombudsman has spoken to have such poor cash flow that they have had to take out loans to pay their expenses while waiting for the big boys to let go of the purse strings.  Others have had to let go of valuable staff, because they just can’t pay those wages.

We all have expenses like staff, rent, tax etc, and a good budget can certainly help with making sure you keep the wolf from the door, but what if you work for a big business which takes up a lot of your time and resources, and then, well, they just don’t pay for up to 3 months?  You are very likely going to have to close the doors.

According to Kate Carnell, Australia’s Small Business Ombudsman on Radio National this morning, big business is paying slower and slower, and they are quite proud of it. Essentially treating small businesses like the bank, they are keeping the money in their own bank accounts longer and thus saving a great deal of money in interest.  This has a trickle-down effect.  She thinks this is quite unfair, especially given that the government keeps telling us that small business is the engine room to our economy!

Carnell estimates that the average small business person spends 2 weeks’ full time per year on the phone trying to get people to pay them.  Chasing people is a hard thing to do, especially when it’s YOU they owe money to.  Let’s face it, it is time consuming, it can be embarrassing, it’s frustrating, and you have a business to run!  Engaging the services of a good bookkeeper can help on many levels, especially where you need a bad cop while you remain the good.

The good news is that with the introduction of online invoicing, like Xero, small business to small business payments have become faster and faster.  State government have been getting better.  That still leaves the big boys and local councils which are still dragging the chain.
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I encourage you to look at the Australian Small business and Family Enterprise Ombudsman website at www.asbfeo.gov.au.  There is a wealth of information there about unfair contract terms, case studies, resolving a dispute, running a business etc.  They also want to hear from you about your story and want to know who you think are good payers, and who are bad.  They are going to name and shame a few and congratulate others.  Their report to government in February of 2017 will hopefully put a bit of pressure on them to take some action to fix this problem.
1 Comment
Sue Heins link
18/11/2016 03:06:05 pm

Oh Lordy,
Now tis the time to chase those debtors, falalala la la la (sung in a Xmas tune)

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    Paula Granelli

    Bookkeeper, BAS Agent, Diploma Accounting, I love helping small businesses get their books back in order and create calm out of chaos.
    Looking for a bookkeeper on the Northern Beaches?

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