Late Payers in the Australian Market

Big businesses using their market dominance to crowd out smaller businesses by delaying the payment of their invoices is something we touched upon in an earlier blog post. 30 day terms are being extended to 60 days and even 90 days in some circumstances, and this can be tough for the majority of small businesses who feel the brunt of the unfair terms.

Big corporations have the power and the position, and they seem to be slow in paying smaller businesses because a) they can and b) they can get away with it. Basically it comes down to the fact that the ones with the money who are capable of paying on time, are choosing not to and there’s very little small businesses can do about it. Paul Nielsen, chairman of the Council of Small Business, has been quoted as saying, ”They’re (small businesses) actually funding the big companies who won’t pay on the agreed terms. Some big companies are using small business and suppliers as a bank, and it’s wrong.”  Yet smaller businesses, despite their inability to make ends meet, feel the pressure to do the right thing and pay their bills on time. 

Coles Australia now requests a 2.5% discount to suppliers if they wish to be paid on time. What was once good business practice has become a privilege to those who can afford to accept these payment terms. In a recent article which appeared in the Sydney Morning Herald, Small Business Ombudsman Kate Carnell said, “What we are told they are telling their suppliers is that ‘we will pay you on time but we expect a discount for the pleasure’.”

Securing prompt cash flow in any business can be difficult even without the hindrances created by the larger businesses. However, there is a way to break the cycle.

Invoice Money’s facility can be likened to a supplier offering a discount to a customer to motivate them to pay early. Sometimes a customer simply doesn’t have the financial resources to take advantage of the discount offered by the supplier. Rather than have to wait for the customer to come up with funds, the supplier can go straight to Invoice Money to get cash in the door. The result is the same net effect as offering a discount for a quick cash early payment.

By using this method, any cash flow issues are solved immediately and everyone in the chain is happy with the result.

Let Invoice Money ease the stress in the long term and allow your focus to remain wholly and solely on the important matters at hand. Contact us today so we can help sustain your cash flow and meet your finance needs. Remember, we are only a phone call or email away.