Nearly 80 percent of Australian small businesses reported cash flow problems over the past 12 months.
A new Commbank survey also found that more than a quarter of small to medium businesses (SMBs) owners (27 percent) dipped into personal savings or didn’t pay themselves a salary, or both, in the last year to overcome shortfalls.
CBA Executive General Manager Small Business Banking Rebecca Warren said the most common factors impacting cash flow were declining revenue (35 percent), low cash reserves (30 percent), and seasonal fluctuations (27 percent).
Ms Warren said the vast majority (85 percent) of surveyed businesses employed one or more specific strategies to manage cash flow, such as reviewing or decreasing expenses (34 percent), maintaining a cash reserve (27 percent), finding additional revenue streams (26 percent), and increasing sales and/or pricing (25 percent).
“Cash-flow strategies are important for long-term business success, and it’s crucial business owners have the knowledge to help them apply strategies that are right for them,” she said.
“For small businesses, success often hinges on a delicate balancing act as they constantly juggle various aspects of their operations, from managing customers and employees to dealing with suppliers and vendors.”
Ms Warren said it was not surprising that the economic challenges of the past year had resulted in cash-flow impacts for many Australian SMBs.
“While it’s encouraging to see small business owners take proactive steps to manage their cash flow, some of those strategies – like dipping into savings or not paying themselves a salary – may not be what’s best for the business or the business owner for the long term.”
She said CommBank had partnered with the Australian Graduate School Management at University of NSW Sydney Business School to create a free course to help small business owners better understand and optimise their cash flow.
“The Cash Flow Management course includes expert advice, strategies and easy-to-use tools that will empower small businesses to manage their finances with confidence. It’s available online, giving business owners the flexibility to learn at their own pace.”
Ms Warren said the short, practical course was available free to all Australian small businesses, regardless of which bank they used.
UNSW Dean of Lifelong learning Professor Nick Wales said more than half (53 per cent) of business owners expressed a desire to undertake a course or training to help with business management.
“We recognise the vital role small businesses play in the Australian economy and are dedicated to equipping them with the tools and knowledge needed to navigate complex financial challenges,” Professor Wales said.
Access the free Cash Flow Management course.
