The new trailer for the Ghostbusters reboot was released on March 3 this year, so let's take a look at what the original classic taught us about the importance of working capital.
The much-loved characters played by the likes of Bill Murray and Dan Aykroyd were instant hits, and Melissa McCarthy and Kristen Wiig are about to step into their green, slimy boots for the 2016 version.
No funny business
Running your own SME can be an uphill battle at times. According to the Australian government Department of Innovation, Industry, Science and Research, the value added to the business sector by small businesses accounted for 35.3 per cent. Large business made up 42.2 per cent while medium businesses only added 22.4 per cent. Overall, small business is a significant part of the Australian economy, so keeping your company in line is good for the whole country.
The need to constantly keep track of your employees' workloads and schedules, as well as the financial situation from the accounting perspective, can lead to the odd unpaid invoice slipping through the cracks, sometimes for months at a time.
Waiting 44.1 days is still too long for repayment for your services, and that could seriously stress you out.
Dun and Bradstreet Australia report that for the last quarter of 2015, the average payment time for invoices was 44.1 days. An improvement of one day over the previous quarter is indicative of a recent industry trend that hasn't stopped dropping since the first quarter of 2015.
That timeframe is still too long to wait for repayment for your services, however, and actually waiting for more than a month could stress you out more than some of the ghosts in the trailer above!
The money that is owed to your business should be available for use to grow, expand or solidify your position within the industry, and not having access to those funds could leave you wanting.
What can the Ghostbusters teach you?
When the Ghostbusters group was starting out in university labs, they were relying on funding from faculties and other research grants in order to operate. When their methods were found to be 'questionable', the funding was pulled and they were left in dire straits. In order to pull through and save the city from certain destruction by ghosts, Dr Ray Stantz needed to take out a mortgage on his house to finance the whole group.
Not only do mortgages take a long time to get approval, but they require significant security to be supplied, which can put even more stress on the business owner. But if you're in a similar situation to Dr Ray and Dr Peter Venkman (Bill Murray), then having access to working capital when you need it could save the day.
A little while ago we went through a few of the ways that your business could expand if it had sufficient access to working capital because cash flow was free enough. As you get to a point when you need to expand, or you are trying to shore up some finances for security purposes, then having the required funding is of the utmost importance. By transferring the responsibility of your unpaid invoices to a company that can provide debtor finance means you will have access to the money your business is owed very quickly, giving you the freedom to move.
Personal assets are not required at all when taking out invoice finance, and approval is significantly faster than banks. What's more, a bank loan requires you to pay back the money borrowed over time, but invoice finance means that when the invoices are paid to the factoring company, their debt is repaid. You'll have available cash to use, and the debts pay themselves when the clients pay their invoices.
This service needs to be handled by the professionals, so who you gonna call? Earlypay.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].