There's just no way to completely prepare for the future of your business. All you can do is stay up to date on current trends, forge quality relationships and above all, never assume.
Even more so, with recent changes in world trade conditions – it has made managing cashflows more difficult. Increased competition between suppliers has meant that overseas buyers are now regularly able to demand and obtain “open account terms.”Non-payment is one of the biggest fears of businesses because a sale isn’t a sale until you’re paid!
Australians regularly or occasionally draw upon personal finances, like a personal credit card, to support their business—a practice that does not equate to long-term success. If you want to maintain a healthy financial position, employ these effective money-saving strategies.
Keep your financial health in check. As your business grows, you need to make sure you work with an accountant that understands the fundamentals of your business and where you are looking to go. Your accountant will help you stay on the right track with your financials as you expand into new markets or enter into an export supply chain.
A simple invoicing and payment collection process.Before making the leap into the international market, take the time to understand how different invoicing requirements, taxes, tariffs, and even time zones and languages will affect your invoicing and payment processes. Also take into account the limited legal recourse you’ll have holding companies accountable across national borders.
Begin with credit checks.What seems tobe a fundamental practice, it’s scary to know that more than 50% of businesses don’t do credit checks before they extend credit to their customers^. Not all customers are made equal. When your cash-flow is contingent on each party paying on time you need to know who can afford to extend credit to and who you should be asking for alternative payment methods. By obtaining timely and accurate credit decisions you can capitalise on the right opportunities at the right time.
When was the last time you did a financial health check on your customers? Find out more here.