SMEs highlight top concerns
Cash flow remains among the top concerns for small businesses as new research highlights that four in ten business owners will spend eight hours per week chasing invoices over the Christmas period.
The Westpac Small Business Report – in collaboration with Deloitte revealed the “Christmas” wish list for small business owners.
The survey found that SMEs expect to receive payments from debtors later over the Christmas period. The research also revealed that these businesses also spend 12 hours each week completing paperwork in order to comply with regulation.
Deloitte Access Economics estimates the cost of regulation to Australian businesses is $100 billion annually.
“Cash flow is the life blood of any business and being able to manage it is extremely important, especially in the lead up to a busy period like Christmas,” Westpac general manager of SME Banking Ganesh Chandrasekka said.
The bank’s invoicing solution Biz Invoice is among Westpac’s initiatives to help SMEs manage their cash flow by giving businesses the ability to create and send customized invoices direct from Westpac Live online banking at any time.
The bank has also signed up to the Australian Supplier Payment Code to which commits businesses to pay all suppliers on time.
“Our goal is to provide the capability for business owners to leverage quicker payment terms and quicker access to funds. Biz Invoice positions us well ahead of the federal government’s roll out of e-Invoicing next year which will standardise electronic invoices to help reduce admin costs and boost productivity for small businesses,” Chandrasekka said.
The survey, however, did reveal a level of optimism among SMEs.
One third of businesses feel positive about the Christmas season, and importantly the most profitable businesses are driving revenue growth through improvements and introducing new products and services.
“We found the businesses that experienced growth in sales, profitability and productivity were those that are ‘innovation active’,” Chandrasekka said.
“They tend to put effort into significantly improving their operations or offering new goods and services and considering the big picture rather than the day to day of running a business.”
A positive outlook
The report also revealed that revenue growth for SMEs has remained consistent over the year, which has been primarily driven by businesses expanding their domestic customer base (58 per cent).
When looking across sectors, manufacturing is the stand out, with strong income growth (80 per cent), export growth (65 per cent) and customer base expansion (71 per cent), compared to this time last year.
Despite some headwinds, the outlook for SMEs remains positive.
“GDP growth is expected to slow back to 2.7 per cent next year and we expect businesses to feel some additional uncertainty due to the Federal election, a soft housing market and lacklustre consumer demand,” Chandrasekka said.
“Despite these pressures, employment growth is expected to remain quite strong, with continuing above-average investment in private and public infrastructure, competitive assistance from a lower AUD is expected to continue along with rising exports and solid population growth.
“These are positive signs to help boost the confidence in small businesses, so they can help drive our nation forward.”