Australian small businesses are losing out on opportunities worth thousands of dollars due to insufficient cashflow, with nearly half admitting they’ve been at risk of being unable to pay their employees, new research has revealed.
A new study1 from Wakefield Research, commissioned by Intuit Australia, surveyed 500 small-business owners in Australia and revealed half (50 per cent) have lost AUD$10,000 or more by foregoing a project or sale because of issues created by insufficient cashflow. Overall, Australian small businesses have lost out on $5.8 billion as a result of cashflow constraints.
According to the Wakefield study, nearly half (46 per cent) of small-business owners have been at risk of not being able to pay their employees by payday, and the majority (54 per cent) of respondents have been kept up at night by concerns about cashflow, even if their company has not suffered from it.
The Wakefield study also found the following findings:
“It’s a huge red flag that so many small-business owners in Australia are turning down opportunities and missing out on additional revenue as a consequence of issues with their cashflow,” John Dunkerley, Country Manager, Intuit Australia, said. “Our research emphasises the importance of regularly reviewing and analysing cashflow. Day-to-day operational demands can make finding the time to do this difficult, but without money being transferred into your business you will find it hard to grow, or even operate effectively.”
Dunkerley added, “It’s disappointing that many businesses are not taking advantage of affordable, easy to use online financial management tools, especially given most Australians are very savvy with their personal use of technology. Business owners can increase their efficiencies across a range of business tasks, such as preparing their bank and credit accounts, providing statements and organising their superannuation and, being STP compliant.”
Kane Munro CPA, Director at Accountancy Online, who will be delivering a session in the financial health stream at this year’s QuickBooks Connect Conference said, “It’s understandable that small-business owners are losing sleep over cashflow: it’s a make or break issue. My advice to small-business owners who are having trouble is to simplify and automate their accounting processes. Cloud accounting solutions can be used to generate instant reports to make predictions for future cashflow, allowing businesses to more easily prepare and adapt.”
A separate survey of more than 500 Australian small businesses conducted by Intuit Australia in March 2019 revealed that only 44 per cent of small-business owners are currently using payroll software.