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Debtors Management for SMEs: Navigating Financial Stability and Cash Flow Challenges
11/05/2024
Debtors Management for SMEs: Navigating Financial Stability and Cash Flow Challenges
In this episode, Peter Towers addresses the critical issue of debtors management for SMEs facing financial challenges in Australia. He emphasises the importance of effective credit management and how poor practices, such as granting credit without proper systems, can lead to cash flow problems. Towers discusses common pitfalls SMEs encounter, including inadequate credit terms, lack of monitoring, and unrealistic assumptions about payment timelines. This episode also highlights the role of accountants and bookkeepers in helping SMEs establish strong debtor management systems. This includes setting clear terms of trade, ensuring compliance with payment documentation, and actively following up on overdue accounts. Towers also notes recent legislative changes, like Australia’s Payment Times Reporting Act, aimed at improving payment practices, particularly by larger companies. This episode serves as a guide for SMEs and their financial advisors to implement practical strategies for reducing outstanding debts, thereby enhancing cash flow and financial stability. You can also access our podcast on:
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