The cloud is redefining how we live and do business. It is now being recognised as a global economic engine underpinning new innovations, new business models and even entirely new industries. Now data can be created, stored, disseminated and accessed real-time from anywhere in the world that is connected to the internet. This has created a data explosion with 90% of the world's data being created in the last 2 years!
“Show me the money!!!” - Jerry Maguire
Guest content courtesy of Thomas Taylor @ T2 Consulting
Having foresight over your monthly cash flow statement is critical to the survival and success of your business. Every business owner should be asking the following questions to best understanding cash flow forecasting for their small business:
"Can we pay our employees at the end of month?"
"Do we have the cash to pay PAYG and GST at the end of the month?"
"Can we afford to take on this big new customer?"
"Can we get prices if we pay suppliers earlier?"
The most common reason for cash flow pressure in an agency is long-dated invoice payment terms enforced by the end-customer. In Australia, there is on average over $19m worth of invoices outstanding longer than 30 days, while 44% of invoices are being paid late. This is typical throughout the marketing, media and advertising industries. Publishers, app developers, production, modelling and creative companies all suffer from slow invoice payments which crushes their cash flow.
It doesn’t matter how big your business is, every company is susceptible to a lack of cash flow. We need not look further than Tropfest that happened earlier this year. The world’s largest short film festival was cancelled last year to financial negligence and was only saved from the same fate in 2016 at the eleventh hour through a financial lifeline from new sponsors.
Ever had an idea for a business but just been too afraid to start? Prior to this year, you would have probably been forgiven for not taking the plunge in the Australian market. You probably thought that your only way of getting the help you need was by featuring on the next episode of Shark Tank.