Despite an ongoing trade war, and other occasionally troubling indicators in the global economy, Australia and New Zealand have maintained growth in their economies in 2019. Today, though, businesses rely on the global economy to facilitate their growth—simply ignoring global economic developments is not an option. This is highlighted by the World Bank’s stark warning on 20 December 2019 that financial markets may face another global crisis. Businesses need to be aware of, and manage the risks that their national and global economy faces while pursuing their own success.
It’s easy to get distracted by the daily challenges of leading a business. Business owners and leaders are always faced with an endless to-do list, usually forced to prioritise the most immediate short-term threats. For all but the most disciplined, that inevitably means that long-term concerns like growth strategy are sidelined, eventually falling off their radar entirely. To get back on track, they need to improve cash flow management, strengthen their supply chain, and ensure their ability to access growth capital and investment.
Late payment is the single most common type of cash flow interruption faced by businesses all over the developed world. Faced with growing scrutiny from the ASBFEO, the Australian government, and major businesses in recent years, it’s become a high profile issue concerning particularly SMEs. Cash flow interruptions, like late payments, can hamper a business’ ability to grow, interrupt growth plans and make it extremely difficult to budget reliably for the future.
Businesses are complex organisations’ that rely on the seamless integration of many different parts to function. Managing cash flow, production, quality control, sales and marketing, taxes, payroll, and human resources is more than enough to occupy the time of any leadership team.
While the period leading up to Christmas represents a growth opportunity for businesses, the summer holiday itself presents a number of significant cash flow challenges. After the holiday rush, businesses are still left paying for parties and holiday bonuses, leaving their budgets strained. Because of this, many don’t have sufficient working capital on hand to manage their costs during the month-long quiet period.
A business can’t make money without first spending it. Traditionally, that means using saved working capital, a line of credit, a business loan, or investor support to fund operations. Those funds are then invested in the business’ operations, purchasing supplies, paying for labour to create products, and spending to market and sell those products. Then, once the products or services are sold, the business can collect its revenues and earn a profit.
After what has been a tough year for businesses in many industries, keeping employee turnover and recruitment costs low is critical. By keeping their workforce as stable as possible, businesses can better maintain productivity and quality standards, while limiting the resources spent on finding and onboarding new talent. Improving retention, however, is a complex issue.
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.
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.