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So, we’re almost into our final quarter of the financial year. And most small business owners are going to have a couple of matters on their minds, the same things that seem to pop up around this time every year;

  • How did we get here already?
  • Things are looking pretty good, but slow trading through December and January are really starting to hurt at the moment.

        ‘Don’t let the ATO scare the crap out of you like they do some small businesses.’

    It can seem a bit cruel that for so many small businesses, just as we start to hit our straps again and see some really healthy trading figures, along comes The Ghost of Slow Trading Past to bite us in the bum. We’re making good money now, but struggling to handle basics such as BAS payments and meeting payroll because of the knock-on effects of a quiet Christmas/New Year sales period. So let’s take a look at action you can take now to make sure that this is the last year you’re faced with this sort of problem.

    Talk to your accountant

    Yes, that’s right, call your accountant! And if that seems a little left-field and has you thinking ‘but it’s not even tax time, why would I call my accountant?’ can I suggest that it’s either time for you to re-think how you deal with your accountant…or get a new one. The truth is, a good accountant should be calling you regularly to check on how your business is going, to compare notes and offer suggestions. Working with your accountant just once or twice a year is no way to run a progressive business. Small issues become bigger with time and neglect, and before you know it, you’re faced with expensive problems that are too far down the track to address.

    If you are behind in tax you need to work with your accountant and have them negotiate a payment arrangement with the ATO that’s realistic for your business. Yes, you might need to provide a cashflow forecast, but it’s worth it to get the result you need. Don’t let the ATO scare the crap out of you like they do some small businesses. They will usually cooperate and help with a payment arrangement, just bear in mind that if you default on an arrangement they won’t see the funny side, and may well refuse to re-negotiate arrangements in the future. Don’t be scared, just be smart.

    So call your accountant now and ask for some suggestions. If the person you’re dealing with is worth their salt, you might just find that they have some worthwhile suggestions – especially regarding dealing with the ATO – to help you cope with the situation you’re facing right now. And furthermore, maybe now is a good time to see if you can foster a relationship with your accountant that involves more regular contact for better business results. If they’re not interested, go somewhere else!

     

    Consider Debtor Financing

    Cashflow problems need prompt solutions – you need to deal with them right away before a mere problem grows to become a real disaster.

    Most small businesses have relationships with banks or traditional lenders, and, I suppose logically enough, banks are the first place people go when they need help with money to tide a business over. Here’s the thing; I’m not at all sure that there is a file anywhere in any bank labeled ‘prompt solutions.’ Banks move slowly. You will usually wait weeks for an answer on a line of finance such as borrowing against your home, and when you finally get the answer, it might not be the one you want. Meanwhile you’ll have plenty of time to ponder the question ‘do I really want to put my home on the line for this?’

    Debtor Financing, by comparison, is all about speedy answers. The application process is very straightforward, and once it’s taken care of, you’ll be able to get your hands on the cash you need very quickly indeed. Perhaps best of all, you’re not actually borrowing money, you’re just being advanced cash that you’re owed by clients anyhow. Here’s a quick snapshot of how Debtor Finance can work;

    1) Apply for Debtor Finance – approval often within 24 Hours.
    2) When you send an invoice to a client, you also send it to your Debtor Financing company.
    3) You will be paid as much as 80% of the value of the invoice by your Debtor Financing company often within 24 hours of invoicing.
    4) You will be paid the remaining 20%, minus an agreed fee, when your client pays the invoice.

    And there you have it – simple. No long waits, no borrowing against property – in fact, no borrowing at all. You simply receive the cash you are owed straight away instead of waiting 30 days for it…or 60…or 90. And there’s a lot to be said for getting your money and just getting on with business instead of spending the days and nights worrying yourself into a nervous wreck. Business will always be a challenge, but it’s meant to be enjoyable, too.

    Wishing you all the best for your week in business,