Track pay­ment per­for­mance

Grocott's Mail - - ECONOMIX - By HELMO PREUSS

Anew web­site, www.gen­tlere­, aims to help small busi­nesses with man­ag­ing their cash flow, as many busi­nesses fail be­cause cred­i­tors did not pay them on time or re­fused to pay de­spite re­ceiv­ing goods or ser­vices from the busi­ness.

Deputy Min­is­ter in the Pres­i­dency re­spon­si­ble for Plan­ning, Mon­i­tor­ing and Eval­u­a­tion, Buti Manamela, said a fail­ure to pay in­voices within 30 days is a fi­nan­cial mis­con­duct. The gov­ern­ment at cen­tral, lo­cal and pro­vin­cial level is how­ever part of the prob­lem. In April 2016, there were 11 375 in­voices due by na­tional de­part­ments that were paid af­ter 30 days with a value of R327 mil­lion.

Fol­low­ing grow­ing con­cerns by busi­nesses over the non-pay­ment of in­voices the depart­ment es­tab­lished a unit to deal with the 30 day pay­ment of in­voices in April 2015 to mon­i­tor the per­for­mance of cen­tral gov­ern­ment de­part­ments in this in­di­ca­tor, but as yet no unit has been es­tab­lished to mon­i­tor the per­for­mance of pro­vin­cial and lo­cal gov­ern­ment en­ti­ties such as Makana Mu­nic­i­pal­ity.

A sur­vey of 826 South African busi­nesses con­ducted by the eco­nomic rights group, NewERA, re­vealed that: 73% say that cus­tomers prom­ise to pay on a cer­tain date, then do not hon­our that prom­ise; 64% say they ex­pe­ri­ence late pay­ments; 48% say that col­lect­ing money from clients is aw­ful; 45% have to con­tin­u­ally hound cus­tomers for pay­ment; 43% say that cus­tomers duck, dive and avoid re­minder emails and 27% say that late pay­ments are a ma­jor prob­lem and threat­ens the con­tin­ued ex­is­tence of their busi­ness.

Three out of every five com­pa­nies in South Africa fail de­spite show­ing an ac­count­ing profit, ac­cord­ing to Frank Knight, CEO of credit man­age­ment ser­vice, Debt­source. When there is no cash flow to pay rent or salaries a com­pany is vul­ner­a­ble to fail­ure, no mat­ter what its per­ceived profit based on re­ceiv­ables that may be paid late or never.

The Gen­tle Re­minders Club, is an on­line plat­form where busi­nesses small and large will be re­warded for pay­ing their ac­counts on time. More im­por­tantly, it will also in­clude a watch-list for bad-pay­ers. Both the cus­tomer and the sup­plier will be able to dis­cuss the in­voice us­ing a sim­ple con­fi­den­tial chat room that lim­its the need for awk­ward and con­stant col­lec­tion emails and phone calls.

En­tre­pre­neur Scott Cundill first tested the idea with his LinkedIn con­nec­tions. In a mat­ter of two weeks, and with­out any ac­tual func­tion­al­ity avail­able, al­most 500 busi­nesses and book­keep­ers from over 15 dif­fer­ent coun­tries signed-up. The ma­jor­ity were from South Africa.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.