SMES LOOK­ING FOR GROWTH IN­DI­CA­TORS: 2014

Business First - - NEWS -

New re­search from Bibby and Core Data re­veals that fi­nan­cial and in­sur­ance ser­vices SMEs are the most con­fi­dent about their busi­ness prospects (85%), fol­lowed by those from ad­min­is­tra­tion and sup­port ser­vices (80%) and ed­u­ca­tion and train­ing (79%).

How­ever, while SME con­fi­dence is high, al­most one in three SMEs re­port find­ing cash flow more dif­fi­cult to man­age than 12 months ago and al­most half be­lieve there has been no change to their cash flow sit­u­a­tion. Cash flow is­sues ex­pe­ri­enced in the past 12 months in­clude one in four SMEs (28.9%) re­port cus­tomers mak­ing ex­cuses for slow pay­ments, 21% re­port de­clin­ing mar­gins and 15.8% have had is­sues with Govern­ment ‘red tape’, com­pli­ance and tax ad­min­is­tra­tion.

Trig­gers di­rectly from cus­tomers that have neg­a­tively im­pacted SME cash flow in the past 12 months in­clude 27% have suf­fered late pay­ments from a client, 15.3% have had a bad debt be­cause a cus­tomer has gone bust and 12.6% have had a client ne­go­ti­ate to pay an in­voice in monthly in­stal­ments.

Mark Cleaver, man­ag­ing di­rec­tor, Aus­tralia and New Zealand, said: “Prob­lems like these are forc­ing some SMEs into less pro­duc­tive ac­tiv­i­ties, like hav­ing to spend more time chas­ing pay­ments (17%). We also found that some SMEs (11%) are of­fer­ing dis­counts for early pay­ment and 15% of SMEs are even re­fus­ing to trade with some clients due to non pay­ment.”

The re­search from Bibby Fi­nan­cial Ser­vices and Core Data, con­ducted from Fe­bru­ary 3-14 on 859 SMEs across Aus­tralia, re­veals that Aus­tralian SMEs hold a largely neu­tral po­si­tion in re­la­tion to cash flow. The Bibby SME Cash Flow In­dex Score of +1.02 high­lights that cash flow has marginally im­proved from July 2013, though it has sus­tained a re­cov­ery from a low in Au­gust 2012.

Andrew In­wood, founder and prin­ci­pal of Core Data, said, “De­spite high lev­els of busi­ness con­fi­dence, al­most half the re­spon­dents (49%) think the Aus­tralian econ­omy will stag­nate this year. One in three (33%) ex­pect the do­mes­tic econ­omy will con­tract, while just 18% think it will ex­pand.

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