Seek Expert Advice to manage working capital – SMEs advised

Small Businesses should explore strategic advice to manage working capital according to a leading national survey of small businesses.

The *SME Growth Index is Australia’s longest-running in-depth research on small business growth prospects.

Their research found the strategies SMEs planned to manage working capital in 2021 were:

• undertaking cash flow forecasts (the key strategy nominated by 28% of all SMEs – but around half of larger SMEs with $5-20m revenues)
• focusing on existing customers (27.5%) or new customers (22%) to grow revenue
• making arrangements with the ATO (17%)
• using invoice finance to smooth out cash flow peaks and troughs (16%)
• increasing their overdraft (12%)

1 in 6 businesses were looking to Invoice Finance to manage their cash flow using financial solutions such as invoice finance, trade finance and asset finance during the pandemic recovery.

John Sutton, CEO at Scotpac commented, “We would like to see more small businesses undertake cash flow forecasts because our research found that only a quarter of SMEs do so – this is fundamental to success, and this is something accountants and brokers can be reinforcing to their clients.”

He said the fact that so many businesses are looking to restructure and are looking for ways to manage their working capital provides a perfect opportunity for accountants and brokers to initiate discussions with their SME clients.

“Australia’s small business sector relies heavily on brokers and accountants, who understand the importance of cash flow and have a good understanding of strategies and solutions to enable business success.”

“It’s the perfect time for accountants and brokers to ask their small business clients what changes they are looking to make, whether they have a clear view of how much working capital this will require, and if there are shortfalls, help them find new ways to fund the business.”

We offer our clients a range of flexible finance solutions to help businesses access the capital they need to grow. Speak to us today to explore your funding options.

*SME Growth Index: Twice a year since 2014 market analysts East & Partners conduct this research, Australia’s longest-running in-depth research on small business growth prospects. A representative national sample of 1253 $1-20m revenue businesses were surveyed and interviewed.

Feel free to contact us for anything that relates to your business finances so we can help with your success.

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