A report prepared by a UK based organisation in 2017 highlighted the problem that many small/medium enterprise operators had been complaining about for years – the extremely high level of Debtors’ Days Outstanding in Australia.
The UK report identified that Australia had the dubious title of having the “longest Debtors’ Days Outstanding in the World”. The Australian figure was 56.4 days considerably longer than the next closest country.
It is pleasing to note that the Prime Minister has instructed federal government departments to make payments to small/medium enterprises within twenty days. Whilst this is very acceptable to the SMEs who deal with federal government departments, thousands of small/medium enterprises do not deal with federal government departments although many of them do have transactions with state or territory Government departments and big business. It is to be hoped that these governments and business will follow the Prime Minister’s lead and ensure that their organisations pay SMEs within twenty days.
However we believe there is another significant problem and that is that many small/medium enterprises have not established an appropriate system for the control of their debtors. The commencement of the Personal Property Securities Register regime in January 2012 has further complicated the Debtors’ Management System for many businesses.
ESS Small Business in conjunction with ESS BIZTOOLS have developed the SME Debtors’ Manual to assist small/medium enterprise operators to implement appropriate systems relative to the control of debtors in an attempt to reduce Debtors’ Days Outstanding within small/medium enterprises.
We believe that users of the SME Debtors’ Manual will see an improvement in Debtors’ Days Outstanding thus contributing to an improvement in the businesses management.
