In Australia, the average number of days business to settle accounts has risen to a seven-year high of 56.5. 

Slow payers leading to hot collars

"On another note it is also noted by Dun and Bradstreet that an early indicator of consumer stress is the non payment of mobile phone bills. Apparently mobile phone bill default is rising rapidly and this suggests stress at the individual level which then suggest stress at the mortgage level and so on."

"Mar 4 2009 Nearly a third (29 per cent) of small and medium sized companies (SMEs) reported cash flow problems in the second half of 2008, with 70 per cent citing late payment of invoices as the primary factor, according to research by Lloyds TSB Commercial."

 

 

"In the wake of one of the worst holiday spending seasons on record, more retailers are squeezing their suppliers by extending payment schedules, Debtwire reports. The tug-of-war over the issue %u2013 and the disappearance of credit insurance %u2013 has sent vendors scurrying through a mousetrap full of retail bankruptcies, no-win negotiations and dwindling choices."

"Interest free loans! Sounds great doesn't it? Well that's what businesses do when they offer credit terms to their customers. Sure it's considered normal to allow a customer thirty days to get their bookkeeping in order to pay the bills. But very large companies especially, take advantage of this largesse and take 60 - 90 days to pay an invoice. That becomes 3 months of interest free money. Your money. You are essentially helping to grow their company using your resources."

Art of Factoring Blog Archive Free Money!

Well, this is all very true but is factoring the answer? Only the business owner can make the final decision, but before they do, explore all the options available.

"The commercial world is tightening its belt. Major Banks are reporting a growing number of British firms have fallen behind with their repayments. Business debt collection is more important than ever to prevent cash flow issues. This has led to larger companies getting more aggressive and:

1) forcing extended credit terms on suppliers

2) demanding discounts on already agreed prices

3) demanding settlement discounts for just paying on time

4) Imposing retrospective rebates for goods already delivered.

5) Using late payment as an easy way of funding their own cash flows.

These are extremely worrying developments for the whole business community."