A new survey has revealed that small business owners are spending too much time on their day-to-day banking and not enough on developing their business.
According to the Commonwealth Bank Better Business Survey, 73% of Australian small business owners wish they could spend more time on developing their business, but 49% are too busy working on inventory management and 43% feel that business banking is taking up most of their time. Meanwhile, 41% would like to focus on bringing in new sales and 35% want to allocate more time to marketing. Over a third wish to spend less time on supplier management (39%) and cash flow management (35%).
Kelly Bayer-Rosmarin, executive general manager at Commonwealth Bank, believes small business owners often struggle with managing their cashflow as there’s often a lag time between billing customers and when they actually pay up. This results in small business owners in being out of pocket for quite some time.
“Say you’re a services business, you might be really busy performing services, but if the customer hasn’t paid the bill and won’t pay it for another 30 or 60 days, you might not have enough money to buy supplies to service the next set of customers. That lag time in billing and collecting can be a problem for small businesses,” she told Smarter Business Ideas
Inventory is also quite tricky to manage for small business owners, as they need to understand how much to order at what point in time and it often comes down to predicting demand and seasonal influences. Those business owners that have seasonal businesses often struggle, as a big influx of money only occurs during certain peaks during the year. Common issues involve trying to access credit during certain times of the year and working out systems to manage their overheads, explained Bayer-Rosmarin.
Kelly Bayer-Rosmarin's tips to stay on top of your cashflow:
- Consolidating your accounts is a practical way so you can access everything and deal with one individual. That will save you time.
- Pick a bank that’s got leading online platforms and good 24/7 support. That’s critical because so many business owners need to do their banking after business hours, so having the best online capabilities mean you can do a lot on your own. And with 24/7 support, if you have a question at 9pm, you can get it answered right away.
- Get advice from your business bank as to whether you’ve set your systems up correctly. If you're having trouble collecting money, because of lag time, there may be other ways you can take payments. There might be online tools that can let you take credit card payments off your iPhone or iPad when you’re with your customer, or there might be direct debt systems. There are tools you can use to make your process efficient.
- The Commonwealth Bank has just released the Better Business Package, which aims to help simplify business banking. For more information, visit: commbank.com.au/businessbanking.