RIABU - Tips and tools for getting paid on time by your customers

Unfair payment practices to SMEs attract scrutiny

In Australia, the federal government has asked for an investigation into ‘reverse factoring’, and long overdue payments amid complaints that large companies are paying their invoices up to 90 days late. And we know most SMEs may not be inclined to chase hard for payments for fear of offending their customers.

But is it good to just implement a ruling across all the different industries and make everyone commit to paying within 30 days?

RIABU’s Simon Littlewood and Mark Laudi discuss whether heavy top-down rulings even reflect commercial reality and how SMEs will be affected by such regulations.

 

 

 

What every customer in the industry can learn from the Air India fuel supply problem

Air India, groaning under the strain of debt, is facing payment issues for its jet fuel.

It has been issued yet another ultimatum by its fuel suppliers because of its patchy payment record. We will know on 18 October whether Air India can pay up, or risk grounding its flights.

RIABU’s Simon Littlewood and Mark Laudi discuss ways to ensure you retrieve your receivables from customers who are in debt but are solvent.

China SMEs to get paid faster by state companies

China’s government is getting serious about stopping late payments. It has come up with rules to get government departments and large state-owned companies to pay their bills to smaller companies on time.

The companies that refuse to comply will be put on a court-administered blacklist and face fines of RMB 100,000 to RMB 500,000.

RIABU’s Simon Littlewood and Mark Laudi talk about how China can no longer look the other way for the tardy payment history of SOEs as SMEs will struggle and go bust.

Australian SME owners struggle to find funding, have to dig in their own pockets sometimes

A report by the Australian Small Business and Family Enterprise Ombudsman says SME owners struggle to find funding and sometimes have to dig into their own pockets to finance their own businesses.

The report says one in five SMEs are experiencing cash flow problems due to their business loans being rejected.

RIABU’s Simon Littlewood and Mark Laudi discuss the unhealthy dynamic of how most SMEs choose to borrow instead of managing their cash flow better and ensuring they collect their receivables on time.

 

 

 

Does Brexit mean small businesses should insure their invoices?

Brexit means a lot of uncertainty for businesses, and this might mean some of them might get their payments late, or not even get paid.

RIABU's Simon Littlewood and Mark Laudi discuss whether small companies should even think about insuring their invoices, and if they have another recourse to manage their risks in uncertain times.

Nufarm gets rewarded for positive risk management move

Nufarm recently sold off part of a subsidiary in Brazil for A$1.2 billion. The Australian agricultural chemicals company had been under pressure to reduce its debt - it was leveraged at three times its earnings. The disposal would cut its leverage to 0.7x.

Investors rewarded Nufarm's move to improve its balance sheet by buying into its shares, sending its stock price up, reversing its status from being a heavily-shorted stock on the ASX.

RIABU's Simon Littlewood and Mark Laudi discuss what Nufarm's move means ahead of recession worries and why companies would do well to look at risk management in these times.

The mysterious case of Thomas Cook's collapse

Travel company Thomas Cook shocked everyone when they recently announced they were filing for bankruptcy, leaving 150,000 of its customers waking up in foreign countries without a ride home.

It was not a victim of late payments as it had a lot of customers who paid upfront for their holiday packages. But it still went bust.

Surprisingly, the company actually ran out of cash.

RIABU's Simon Littlewood and Mark Laudi discuss the real reasons why Thomas Cook went under.

How to get your CEO's backing when talking to your customers about payment terms

We had several visitors to our exhibition space at the SMEICC 2019, who lamented that their CEO was actively undermining their efforts to get invoices paid on time.

In one case, the CEO was telling customers they could have more flexibility in credit terms, even as the finance department was insisting on prompt payment.

RIABU's Simon Littlewood and Mark Laudi discuss how to bring your own CEO on board.

How to overcome cultural barriers in discussing payment terms

We always advocate you bring payment terms into your conversations with customers early, to avoid collections becoming an issue later.

But if you are shy about this because it seems incongruous in the culture you're living and working in, there is still something you can - and must - say and do.

RIABU's Mark Laudi and Simon Littlewood tell you what and how.

How to bring up the issue of prompt payment when your customer urgently needs your product or service

A customer calls and urgently needs you to provide your service. There's not enough time to highlight price and payment terms.

The customer is happy with the speed of your response, but later balks at the price and payment terms.

How do you emphasize the importance of your payment terms when there is very little time to do so?

Insights from RIABU's Mark Laudi and Simon Littlewood.