The growth of debtor and invoice finance as a more appropriate and flexible tool to support the growth of businesses on both sides of the Tasman has been confirmed by figures recently released by the Debtor and Invoice Finance Association of Australia and New Zealand (DIFA).
As a result of steady increases, debtor finance (discounting and factoring) in the 12 months to the end of December 2013 totalled $63.3 billion provided to Australian businesses. This figure represented an increase of 10.8% when comparing the first half of 2013 to the second half of the year. This increase was a reflection of businesses proactively seeking flexible finance solutions to offset the burden of poor cashflow in advance. As SMEs on both sides of Tasman become more familiar with the ability to leverage their debtors ledger and enhance cashflow, this trend will continue with New Zealand businesses increasingly taking the lead from their Australian counterparts.
Lee Clarke, Chairman of the Debtor and Invoice Finance Association also points out that in addition to the well recognised benefits of freeing cash and utilizing improved cashflow positions to obtain early settlement discounts from suppliers/creditors, the benefit in the saving of management time spent in chasing slow payers that could be better spent on areas more appropriate to their responsibilities cannot be underestimated.
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