The Australian Tax Office (ATO) has cracked down on tax underpayment in the past year. In doing so, they’ve drawn particular attention to superannuation payments, which a large proportion of businesses chronically fail to pay on time. This is in many cases because businesses borrow their employees’ superannuation to cover budget shortfalls, and then catch up on payments when their financial situation improves.
All posts by Will Roffé
Sequencing the human genome, as well as that of various viruses, bacteria, and other lifeforms, has had an enormous impact on our lives. It’s allowed us to create new medicines, to improve the foods we eat, and to inform us about our own genetic history. One of the world’s most prolific geneticists involved in these efforts over the past two decades isn’t satisfied, however. Dr. Jun Wang sees potential for much more. His dream is to combine genomics with data science to elevate healthcare to an entirely different level.
Despite ongoing efforts by the ASBFEO and the government, businesses are still being impacted by late payments and poor cash flow. A small survey of 153 businesses by MyBusiness found that more than half—58.9 per cent—considered themselves lucky if payments were received within 30 days. More worryingly, a survey by the payment platform Grapple shows that late payments are impacting both businesses and consumers, slowing business growth.
A company culture in which employees freely work together, exchange ideas, and experiment to refine and optimise those ideas is as rare as it is valuable. In order to innovate effectively, businesses need to harness the creativity and problem solving skills of the employees. Unfortunately, most businesses tacitly suppress collaboration and innovation among their coworkers. This makes it much more difficult and costly to develop ideas, to compete with other businesses, and to grow.
While it’s primarily used to refer to the impact that businesses have on the natural environment, sustainability can also be viewed as a much broader guiding principle to doing business. While many businesses aim to deal with short term problems, or seek short term profit, a sustainable one takes short term benefits as well as its ongoing growth in the long term into account.
For many retailers, trade finance is an essential part of doing business. After all, few businesses have the working capital on hand to pay for large bulk orders of stock. Instead, businesses can use this kind of facility to purchase stock internationally in larger amounts than they could otherwise, allowing them to reduce their marginal costs and helping them to compete.
As supply chains have become more complex and more globalised, businesses have developed a growing reliance on their suppliers. Despite this, suppliers in Australia and elsewhere are still forced to make do with long payment terms, and frequent late or non-payment issues. This is dangerous for everyone, including the paying business. Late or missed payments can have serious knock-on effects down the supply chain, causing liquidity issues and interfering with the operations of one or more businesses—which ultimately comes back to haunt the procurer. The more businesses are involved, the more can go wrong when cash flow is interrupted.
The holiday season is a critical time for businesses, particularly for retailers and businesses in their supply chains. In an effort to maximise the benefit of such a massive seasonal increase in demand, businesses need to temporarily boost their operational capacities to match. That means hiring temporary workers, purchasing additional and seasonally relevant stock, and implementing an advertising strategy to get as much attention from holiday shoppers as possible.
Cash flow management is both the most significant and most mundane issue keeping many businesses from making the leap from just getting by to thriving. The most commonly cited barrier to growth is a lack of finances, but a simple lack of funding can always be dealt with. An otherwise good business can normally attract the investors or secure the traditional loans it needs to realise its potential.
According to Australian tax commissioner Chris Jordan, businesses collectively had $26.6 billion worth of tax debt as of October 2019, the vast majority of which is due to tax underpayments by small and medium sized enterprises. Though they have already faced significant criticism over their aggressive tax repayment plan, the government is continuing to put more pressure on businesses to pay up. Despite their ongoing efforts over the past several years, they have been relatively unsuccessful. Tax avoidance and underpayment continues to be a growing problem.