In Dun & Bradstreet’s latest report on indebtedness to Australian businesses, it is indicated that the average debtors’ days outstanding in Australia is 54 days. This does not compare well with the normal trading terms of 30 days. This means that, for a business which has credit sales of $2million, the debtors’ days outstanding would be in the vicinity of $295,000, if their business were trading in 54 days. Whereas if they are abiding by the terms of trade stated by that business, the debtors’ balance would be $164,000. This is a difference of $131,000. If this is the scenario in your business (normally 30 days), there is undoubtedly many things you could do with an extra $131,000 in your bank account.
There are many businesses in Australia that are trading within the 30-day terms. They are utilising debtors’ management systems, which comprise written systems to ensure all aspects of debtors’ management are appropriately followed and include follow-up action, to keep on top of their debtors’ systems.
If you are interested in having a discussion with us relative to the implementation of a debtors’ management system for your business, in an attempt to reduce your debtors’ days outstanding, please don’t hesitate to contact us.
