We’ve all been there. That pit in your stomach when you know you need to chase an overdue invoice. The awkward phone call, the hesitant email… it’s a conversation most small business owners dread.
But what if that ‘awkward’ conversation was actually the key to unlocking thousands of dollars you’re currently losing?
Running a small business in Australia isn’t always easy, especially when cash starts running low. Late payments, unexpected costs, or slow sales can quickly strain your cash flow, threatening your very survival. But don’t worry – there are simple, effective strategies to help you take control and reclaim what’s rightfully yours.
From smart invoicing to low-cost financing, these practical tips can keep your business afloat and propel it towards growth.
Chase overdue payments without the awkwardness
If an invoice goes unpaid, don’t just wait and hope it gets sorted. A polite follow-up can go a long way. Try sending a quick email or making a call a week after the due date. Keep it friendly but firm. Scottish Pacific, a large independent finance provider, estimated that the cost of delayed payments in 2019 was around $234.6 billion in lost revenue.
If following up is too much hassle, consider using a reputable debt collection agency. The ATO also offers free small business courses with helpful tips on handling overdue payments. Here’s an article on how to collect overdue invoices effectively
We wrote an article about the predominant approach to mitigating exposure to late payments, which follows the 62-43-37 rule, as indicated by recent survey findings
Get paid faster with smart invoicing
Waiting for customers to pay can put a serious dent in your cash flow. A survey found that 80% of Australian SMEs struggle with cash flow issues, with late payments being a major factor. So, how do you speed things up? Send invoices as soon as the job is done – no delays. .
Adding a note like “Due on receipt” or offering a small discount (say, 2% off for paying within 10 days) can also encourage quicker payments. Plus, the Australian Taxation Office (ATO) recommends setting clear payment terms upfront to avoid confusion and disputes later.
Here are the top 13 accounting tools for your business needs
Stretch your cash with supplier deals
Suppliers aren’t the enemy – they can actually help improve your cash flow. Negotiating longer payment terms, such as 60 or 90 days instead of the usual 30, gives you more time to pay your bills without draining your cash.
If you’ve been a reliable customer, suppliers might even agree to these terms. You could also ask for discounts if you pay early—every dollar saved can make a difference. Just make sure not to push too hard, as maintaining a good relationship with suppliers is key.
Here’s a resource from the Harvard Business Review on How to Negotiate with Powerful Suppliers that we believe will be helpful
Tap into low-cost financing when you need it
Sometimes, you need cash quickly, not later. Invoice financing can be a lifesaver for Aussie SMEs. Government grants are another great option – these non-repayable funds can help with innovation, expansion, and more. You can find available grants on business.gov.au. If that’s not enough, a small business loan or line of credit from a bank can help tide you over, especially if your credit score is strong
Read how Aussie SMEs are exploring alternative financing options amid the ongoing cash flow crisis.
Cut costs without cutting corners
Trimming unnecessary costs can free up valuable cash quickly, but it’s important to do so without sacrificing the quality or integrity of your business. It’s easy to make the mistake of cutting back on essential aspects of your operations, such as customer service, product quality, or employee satisfaction, in the name of saving money. However, these are the very elements that can help drive growth and customer loyalty in the long run.
Instead, focus on identifying and eliminating inefficiencies. Review your regular expenses- are there subscriptions, services, or supplies you’re no longer using or that could be sourced more cheaply without compromising quality?
Renegotiating contracts with suppliers, streamlining internal processes, or switching to more cost-effective software solutions can all lead to significant savings.
Keep an eye on the numbers
You can’t fix what you can’t see. Use free tools like the cash flow statement template from business.gov.au to track incoming and outgoing money.
Regular forecasting, whether weekly or monthly, helps you spot potential issues early. Apps like QuickBooks or Reckon One (tailored to Aussie tax rules) make it easy to track your cash flow in real time. .
Here’s our expert guide on how to build a profitable business without financial skills
The information provided in this article is intended for general informational purposes only and should not be considered as financial or legal advice.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
…it’s a conversation most owners dread. But what if that ‘awkward’ convo – chasing overdue invoices – held the key to unlocking thousands you didn’t even know you were missing? News, Invoice Dynamic Business
