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News & Media

Businesses urged to prepare for economic uncertainty

Accounts housekeeping required in the calm before the storm

Melbourne, 31 January 2012 - Businesses need to do some housekeeping at the start of 2012 to prepare for what may be a tumultuous year ahead, suggests debtor finance specialist Oxford Funding.

The latest business bad debt claims report by National Credit Insurance (Brokers) showed that November 2011 submissions remained steady, equal to October 2011 and slightly fewer compared to the same period in 2010.

However Rob Lamers, Head of Debtor Finance at Oxford Funding, said businesses should not become complacent with the numbers. "While the number of claims have stabilised, the amount each claim represents is still high. Businesses can still miss tens of thousands of dollars, which is more than enough to be fatal for a small or medium organisation."

The construction industry, particularly the electrical, building and hardware, steel and plumbing sectors, topped the list for the highest aggregate amount of claims, collectively more than $4 million out of pocket. The electrical industry alone chased debts worth almost $1.3 million with just 12 claims, an average of more than $100,000 per claim.

Lamers suggested businesses use the traditionally slow period at the beginning of the year to get their accounts in order to prepare for forthcoming economic turbulence.

"The US is in trouble, Europe is in trouble: the Australian economy can't help but be affected by what's going on globally. Now is the time to make sure your accounts receivable is functioning as it should be. Cash flow is of the utmost importance for sustaining your business," he said.

"If you're having trouble with cash flow, look at sharpening your credit policies and debt recovery procedures, or consider an outsourced solution such as debtor financing. In an uncertain environment like this, never underestimate the value of getting paid on time."