Did you know that cashflow issues are the number one reason Australian businesses fail? Yep! Inadequate cashflow was responsible for almost half of all business insolvencies in 2017/18.
So, how can you avoid business failure? Improve your cashflow and avoid bad debt!
We’re here to help – with 4 ways to minimise bad debt in your business.
Consider conducting credit checks
Prior to engaging with a new client, conduct a credit check to determine their ability to pay off their debt to you.
You can find out information relating to a company or individual’s credit history via Equifax’s Business Credit Express or Illion Express, both of which boast large databases of real-time Australian consumer and business information.
Ensure you’re invoicing correctly
Invoicing is invoicing, right? Wrong. it’s important the correct information is included and that you have a robust tracking and follow up system in place.
Research shows that small businesses across Australia are collectively owed $26 billion! Head to business.gov.au to try and prevent your business from being included in those scary statistics.
Don’t be afraid to recover debts
You may be invoicing the right way and following up every second day, but unfortunately, that doesn’t mean every client will pay.
If you find yourself the victim of non-payment, don’t be afraid to recover the money you’re rightfully owed.
Business.gov.au offers advice on what to do, along with how to find a debt recovery agency to help.
Get insurance for peace of mind
Small business isn’t easy. You can take every precaution possible and do all the right things and still come up against hardship.
Fortunately, insurances such as business insurance and business interruption insurance can provide cover against the kind of bad debts that could see your business stop.
Don’t let your small business fail because of issues you could have potentially prevented. Consider the above, get smart and get peace of mind, before it’s too late.
If you want to insure the risk of hardship for your business, Contact Grace Insurance in Perth to discuss your business insurance options today.