Do you really need external financing, or do you have a cash flow management problem?
The results of Spring Singapore’s SME Financing Survey are out! 64 per cent of Singaporean SMEs said they were facing some form of delay in receiving payments from their customers. Are you one of them?
Cash flow management is one of the top finance-related challenges that every company must master. Causing a trickle-down effect, delays in payments from customers can disrupt business continuity and growth, and derail expansion plans.
Managing Your Capital Well
According to an article in Straits Times (20 November 2017), Singapore companies with turnovers ranging between $10-100 million appear to be struggling the most in managing their working capital, largely due to low negotiating power.
And, while external financing helps to bridge gaps in payment cycles in the short-term, companies will still need to strengthen their cash flow management capabilities to improve their long-term resilience and competitiveness.
To do this, companies may consider diversifying their revenue streams and better managing their risk by adopting alternative revenue streams and income protection measures – such as trade products, foreign-exchange contracts, and insurance coverage. Concurrently, companies can implement tighter credit controls and vet the level of credit risk that a customer poses.
Most importantly, companies can conduct regular reviews of their financial reporting processes and controls, to ensure that potential issues with billing, cash collection and credit terms with their customers can be promptly addressed.
If you need help with setting up credit controls or implementing a new bookkeeping software, talk to us now!
Our group accounting firm, Aspri Associates, is an Accredited Training Organisation (ATO) with the Singapore Accountancy Commission. You can fully rely on us to look after all your cash flow analysis, corporate and personal taxation, bookkeeping software setup, and year-end financial reporting (including audit). We can also act as your “mini finance and admin manager”, helping you to keep track of your monthly invoicing, transactions, payroll and sales reports. What’s more, you will receive essential business insight and financial process for your business!
Alternatively, if you could really do with some extra help, contact us or book a consultation with one of our consultants to find out whether you are eligible for one of the many Government grants or loans available to Singaporean SMEs (with at least 30% local shareholding) which support improved productivity, technology advancement and adoption, intellectual property registration, marketing, and overseas business expansion. We have years of experience in Government grant applications.
Read more: The Straits Times