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What can I do if customers are not paying their bills?

New research has found small and medium-size enterprises (SME) in Australia are finding it harder to manage their cash flow more than they were a year ago.

This was causing business to change the way they engaged with their customers and clients in order to get back some of the money owed to them.

Customers not paying their invoices on time means cashflow problems for businesses.Customers not paying their invoices on time means cash​ flow problems for businesses.

Business experiencing cash​ flow problems

Bibby Financial Services conducted a survey in March, discovering 40 per cent of SMEs are finding it difficult to pay their bills and get money in than they were this time 12 months ago.

Without a steady cash​ flow, running a business becomes much more difficult . Until finances are steady, businesses may be less likely to take risks or make plans for the future.

“One quarter of businesses resorted to ceasing to trade with customers who consistently pay late.”

One quarter resorted to ceasing to trade with customers who consistently pay late. Others reported they are spending more time chasing invoices (23 per cent) and by offering discounts for early payment (19 per cent).

Bibby Financial Services has also released its “SME Cash Flow Index” for March which shows a negative score of -3.3. The index is considerably lower than in February last year when it had a reading of 5.3, although this is an improvement from its July 2014 score of -5.8.

The index is a composite measure of current cash flow and forward projections, providing a snapshot of Australian businesses’ ability to make turn over in the near future.

More businesses were also taking out insurance against the risk of bad debt – 29 per cent of businesses surveyed said they had done this, nearly double the proportion a year ago. Research also found they were not seeking professional advice to help them manage this issue.

How can Chamberlains help?

If you are running a business, Chamberlains Debt Recovery eServices is the place to go to find all the relevant legal documents you need to start the recovery process. They also offer expert legal advice on your legal rights in the event a client isn’t paying your invoices.

Businesses interested in this type of service can apply online where they will have access to all the specialised documents required to start recovering outstanding invoices. The Debt Recovery eService comes with tailored legal advice created and provided by qualified lawyers.

This will give you the peace of mind of knowing you are dealing with the commercial law professionals who specialise in helping Australians run their business more effectively.

If you need help with this type of service, please seek assistance from our Debt Recovery Team today.