'Which bills are companies least likely to pay….' Article by Steve Marsten

When you are a small business owner, having your invoices go unfulfilled is a real challenge and can jeopardise your long-term cash flow and business success.

This is the reason that many companies turn to alternative income streams like debtor finance. These can give businesses a much greater level of certainty in their operations.

For organisations that are concerned about their invoices being paid, a recent survey from Dun and Bradstreet (D&B) has given some insight into which bills are being ignored by companies.

The top invoice that companies are choosing not to meet is from trade suppliers – 37 per cent indicated that these were the bills that would most likely go unfulfilled if they were experiencing a shortage of cash.

Credit cards and phone bills also ranked highly (29 per cent and 10 per cent respectively), while internet, utilities, rent and loan payments all recorded between 5 and 7 per cent.

What’s more, these latest figures from D&B found that cash flow is the biggest concern that companies have, mirroring earlier statistics released in September on business expectations. This most recent study found that cash flow would remain an issue for 31 per cent of businesses.

Although there are clearly concerns for companies around cash flow and filling invoices, there was also some good news to come out of the survey. Among the biggest movements in these recent figures, D&B reported their sales index has risen to 36 points, up from 32 the quarter before and a lowly seven points this time last year.

The index for employment and profit estimates have also expanded, compared to recent quarters.

While businesses are clearly confident about the coming months, these concerns over cash flow and the possibility of missing bills will certainly be a concern for small business owners.

At Sothertons we believe in planning and assessing cashflows. Looking at alternatives to improve cashflows and identifying shortfalls that may require bank support. Call us on 4972 1300 so we can assist you. The earlier you identify the problem usually means the quicker it can be solved.