Long Payment Terms Squeeze Small Business

One of the biggest headaches for small businesses is being paid late. Both the administrative costs and mental toll associated with chasing up receivables can take valuable time away from pursuing organizational goals and business management.

Australian supplier payment code

Although a step in the right direction, the code isn’t without limitations. Compliance with the code relies on good faith. As a result, there are no standards for internal benchmarking and no amenability in keeping with the code. As with any voluntary industry initiative, its viability requires uptake by large and well-established organizations, which for some may require administrative process changes.

Payment times and LUCA

Without a means of enforcing the code, what solutions are available to small businesses to ensure that they are being paid on time? Without regulatory changes or government intervention, there are few things that can be done to enforce faster payment times. However, SME’s are still able to adopt the policy and tools are available to encourage change.

This information is especially useful for businesses to asses whether their clients abide by the ASPC or if they are in the process of transitioning their internal processes. While integrating additional software may be daunting to small business owners, sole traders, such as AV technician James, have welcomed the addition of LUCA to their bookkeeping practices.

“By streamlining my invoices so that I don’t have to manually input them, I know that I’m saving time and I’m paying my suppliers on time. Likewise, LUCA helps me understand which of my clients are consistently paying me late… which gives me an opportunity to either bring it up with them or find a way to manage my cashflow effectively.”

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