New Australian fintech innovations are changing the way businesses get paid
Late invoice payments are the number one cause of poor cash flow for SMEs with many reporting they only have enough cash flow to survive for three months or less.
Inefficiencies in operational processes and payments practices plague many businesses and directly contribute to cash flow problems where, on average, Australian businesses are now taking 34 days to pay their invoices. This becomes especially concerning during the COVID-19 pandemic where, at this time, businesses owners need greater transparency and control of money moving in and out of their business.
Last month, the Australian Government implemented The Payment Times Reporting Scheme that aims to help small businesses get paid sooner.
Under this Scheme, businesses with a total annual income of over $100 million will have to report publicly on how and when they pay their small business suppliers – helping Australia’s 3.5 million small businesses make more informed decisions about who they do business with. Additionally, payment policies have been shortened to 20 days.
While new regulation and policy developments will help shift the long-term culture around business payments, fintech innovations and new technologies will help SMEs address their cash flow challenges now – and Australian fintech companies are continuing to lead the way in accelerating financial services innovation and transformation.
One such innovation that is helping businesses make late payments a thing of the past and address cash flow issues is Spenda – a product of ASX listed fintech, Cirralto Limited, which has one simple goal: to help businesses get paid quicker.
“Late payments have a significant impact on cash flow, especially for SMEs. Not only does restricted cash flow mean businesses need to cover the shortfall of working capital while waiting for payments to process, but it also holds them back from growing altogether,” said Cirralto CEO and business payments expert, Adrian Floate.
Spenda’s payment solution is designed to simplify and automate the entire process, reduce late payments and improve cash flow for businesses. It’s one of the only payment collection solutions in Australia that enables customers to track, group, and batch-pay all of their outstanding invoices simultaneously, set up pay-later plans and get access to working capital.
“Spenda is a real game changer for ending late payments and settling debt quickly. Our system is focused on delivering transparency of payment practices by connecting the buyer and seller through ledger-to-ledger integration to ensure they are working from a single source of digital truth. This ultimately saves time, money and resources for both parties while speeding up payment efficiency,” Mr Floate added.
The Payment times and Reporting Scheme took effect on 1st January 2020 and businesses are required to get their payment practices in order within six months before the first reporting window opens and reports become available to the public.
