Rise in debt claims adds to business woes
Announcement posted by Oxford Funding (Bendigo Bank) 01 Jan 1970
Businesses must stay on top of late payments, says Oxford Funding Head of Debtor Finance
Melbourne, August 29, 2011 - The combination of a 40% rise in business-to-business bad debt claims and an increase in payment terms is another blow to Australia’s already dented business confidence, according to Rob Lamers, Head of Debtor Finance at Oxford Funding.
Statistics released by National Credit Insurance (Brokers) show that claims received in July 2011 were 40% higher than the average for the same period over 2004-2010.
The industries that suffered the most from bad debt, recording both the highest number and value of bad debt claims, were electrical with 21 claims in July 2011 worth more than $2.4 million, building/hardware with 20 claims worth almost $1.1 million, and steel with 9 claims amounting to almost $0.80 million.
“The statistics show that there are a growing number of organisations defaulting on their business-to-business payments. That will have a follow-on effect for other businesses if not nipped in the bud,” said Lamers.
These figures join a recent report on the 2011 June quarter by credit bureau Dun & Bradstreet, which revealed that almost two-thirds of Australian businesses take more than the standard 30-day period to settle their accounts.
The report also found that the number of payments that were 90 days or more overdue jumped almost 20 percent compared with the June quarter 2010.
Lamers said this indicated that small businesses are finding things difficult at the moment. “Economic troubles in the USA and Europe, soft consumer demand and high Australian dollar has seen business confidence in Australia decline. With many businesses forced to wait over three months for much needed cash, there is even more pressure on businesses to stay cash flow positive.”
Lamers said that a business which manages its cash flow closely and provides for bad debts in their forecasts is more likely to survive falling confidence. “Talk to your business adviser or accountant about how you can improve your cash flow. Products such as debtor finance may help get your cash flow back on track.”
For a copy of the bad debt claim report, please email caroline@prgroup.com.au
Statistics released by National Credit Insurance (Brokers) show that claims received in July 2011 were 40% higher than the average for the same period over 2004-2010.
The industries that suffered the most from bad debt, recording both the highest number and value of bad debt claims, were electrical with 21 claims in July 2011 worth more than $2.4 million, building/hardware with 20 claims worth almost $1.1 million, and steel with 9 claims amounting to almost $0.80 million.
“The statistics show that there are a growing number of organisations defaulting on their business-to-business payments. That will have a follow-on effect for other businesses if not nipped in the bud,” said Lamers.
These figures join a recent report on the 2011 June quarter by credit bureau Dun & Bradstreet, which revealed that almost two-thirds of Australian businesses take more than the standard 30-day period to settle their accounts.
The report also found that the number of payments that were 90 days or more overdue jumped almost 20 percent compared with the June quarter 2010.
Lamers said this indicated that small businesses are finding things difficult at the moment. “Economic troubles in the USA and Europe, soft consumer demand and high Australian dollar has seen business confidence in Australia decline. With many businesses forced to wait over three months for much needed cash, there is even more pressure on businesses to stay cash flow positive.”
Lamers said that a business which manages its cash flow closely and provides for bad debts in their forecasts is more likely to survive falling confidence. “Talk to your business adviser or accountant about how you can improve your cash flow. Products such as debtor finance may help get your cash flow back on track.”
For a copy of the bad debt claim report, please email caroline@prgroup.com.au
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About Oxford Funding
Oxford Funding, a wholly owned subsidiary of Bendigo Bank (ASX: BEN), is a specialist provider of debtor finance or cash flow solutions to small and medium enterprises. Since its inception in 1994, the company has continued to remain at the forefront of the Australian debtor finance industry due to its flexibility, innovative product portfolio and commitment to best practice service delivery. Oxford is a member of Factors Chain International (FCI). www.oxfordfunding.com.au
About Debtor Finance
Debtor Finance offers business operators access to a flexible source of finance which unlocks funds tied up in invoices, thereby creating of an immediate injection of cash. The service allows businesses to manage their cash flows and to meet everyday creditor and payroll requirements without a bank overdraft or real estate asset security. For more information, see www.oxfordfunding.com.au