Findings from the Small Business and Family Enterprise Ombudsman have suggested that one in five small businesses dip into workers' superannuation and wages which results to cash flow problems, according to a report by The Australian.
MYOB general manager of SME Solutions James Scollay reacted to these findings and to the suggestion that the onus is on small businesses, stating that late payments by big businesses are often at fault for SME cash flow issues.
“The issue here is one of cash flow and that often comes from big businesses failing to make payments on time,” said Mr Scollay.
“Late payments are a huge cash flow pain point for small businesses. Our most recent MYOB Business Monitor has found 77 percent of business owners are impacted when a customer fails to pay on time.”
Mr Scollay highlighted that the effects of late payment also impact business owners’ personal finances and the ability to cover expenses, such as rent and power.
“The restricted cash flow also takes a personal toll, with 52 per cent confirming it impacts their stress and anxiety levels,” he said.
“Government and bigger businesses could implement a national prompt payment protocol to ensure small businesses are not being delayed payments by other businesses.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.