Why Businesses Need More Money

It is common knowledge for people that savings is very important. However, even if Australians are very careful about their spending, they have still been ranked among the worst savers in the world. Data show that only 11 per cent of Australians are confident that their savings could help them survive for at least 6 months if they lost their job. Moreover, 80 per cent of the population goes on everyday without a household budget according to the 2010 National Savings and Debt Barometer. The sad part is that, people are taking these bad habits into their businesses. As a result, cash flow is among the biggest pain points of the 2 million odd SMEs of Australia. These business owners spend sleepless nights thinking of ways to make both ends meet.
It is said that this decade is considered to be the time of easy credit. Today, it is very easy to grab hold of something that one wants at absolutely anytime by availing of credits. This is what prompts people not to save. People do not even try to save for the rainy days.
One of the most alarming trends that were revealed in the Business Monitor Report- BAS and GST is that 31 per cent of SMEs do not set aside GST tax which is owed to the government. Instead of saving up this amount for the said purpose, businesses have to instantly find this amount of money when the due date arrives.
With regards outstanding BAS payments, the ATO is heard to be having a mass crackdown mode wherein businesses that are behind for at least 6 months are being forced into liquidation. It is, therefore, advised and urged that businesses should hurry up with their GST payments.
Besides tax payments, another thing can be shocking for people when they start checking their mailboxes. The prices of electricity and gas are soaring. With the unregulated sector and carbon tax, an increase in the price of energy in Australia by 30 per cent in four years has been observed. Much worse, the increases in coal and gas are being passed on to consumers.
It can also be noted that another factor that caused the distress is the deteriorating number of prompt client payments. Even Australia’s large companies take an average of 56 days to pay their outstanding invoices.
Despite the improvement of many Australian businesses as they begin to get the right attitude, there is much needed make up work. The average business owner now saves $1.27 per dollar spent. With the economic situation, it is still best for SMEs to have savings plans and trading terms in order to promote good cash flow. Debtors have to be asked for payments, as well as accountants sought, to ensure that savings is available for the rainy days.

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