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The recommendation comes after OptiPay saw a 20 per cent increase in enquiries from businesses worried they may need additional support.
Firms need to seize EOFY to restructure their budget
14 June 2023
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8 minute read
Australian businesses need to use the end of financial year to plan their budgets moving forward as increasing interest rates, inflation and tougher lending conditions create a demanding operating environment, according to SME finance firm OptiPay.
OptiPay said it had already seen a 20 per cent increase in enquiries in June from businesses concerned they may need extra support to grow their business amidst the current challenging conditions.
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CEO of OptiPay Angus Sedgwick said the EOFY is an ideal time for businesses to re-evaluate their position and how to be better prepared moving forward.
“The end of financial year is a time when many businesses look to prepare their budget for the financial year ahead and with an increase in operating costs and overheads in the current climate many are already forecasting challenges in the months ahead,” said Mr Sedgwick.
He said now is the time for owners and managers of SMEs to sort their cash flow for the next year.
“This time of year every business owner should be drawing up a cash flow forecast for the 12 months ahead and identifying challenging periods.”
“Knowing when your cash inflow and outflow are the highest can help you set aside a cash buffer earlier in the financial year.”
“We encourage businesses to come to us early when they’re in that growth phase so we can introduce an invoice finance facility that they can then draw upon if they need it.”
Mr Sedgwick also provided his top tips for businesses looking to improve their cash flow:
- Be on top of your invoices. “Late payments hurt small businesses with some waiting up to three months to receive cash. Consider offering incentives for early payment of invoices.”
- Introduce inventory management. Mr Sedgwick said businesses had to be on top of their stock administration systems to ensure they do not have funds tied up in excess inventory.
- Refresh marketing campaigns. “Use the end of the financial year to consider new sales strategies. Freshen up your marketing campaigns by focusing on new digital campaigns and social media strategies.”
- Manage expenses. “Regularly review your outgoings to see where you may be overspending. It’s a balance of reducing costs without compromising on the quality of your services or products.”
- Leverage financial services. “Consider getting help to keep your cash flow on track. Look carefully at what type of funding solution is going to best suit your needs.”
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