Wednesday, 28 March 2012

Australian economy


Australia: Small firms struggle with bills
MORE than a quarter of small to medium-sized firms face going under because they are unable to pay their tax bills and outgoings, the latest survey by Bibby Financial Services says.


27 March, 2012

The study found that 26 per cent of firms struggled to pay their bills to suppliers, while 24 per cent faced an uphill task meeting their tax payments.

Only 30 per cent of firms said they intended to invest in their business, down from 33 per cent the previous year.

Sales growth also has tumbled, with only 55 per cent of firms expecting an increase, down from 64 per cent.

The overall Bibby barometer index has fallen to 94 per cent, down from 100 per cent.

"Expectations regarding sales growth have deteriorated and cashflow is more difficult," BFS managing director Greg Charlwood said.

"It is clear that current global economic conditions are not only impacting large corporations but also filtering down to Australia's SME sector."

About 40 per cent of firms said managing cashflow, staffing issues, dealing with red tape and tax administration were among the biggest headaches they faced.

The cashflow problems were heightened with almost half of the firms experiencing delays in payment and 27 per cent had to deal with bad debts in the past year.

"Not surprisingly, many remain pessimistic about their future payment terms. Over a third (36 per cent) expect the length of time they must wait to be paid will increase further in the coming quarter," Mr Charlwood said.

With banks requiring "too much security" for loans, at least 34 per cent of firms said they would turn to non-bank lenders to source credit finance.

The survey of 200 SME was conducted last month.

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