ESS BIZTOOLS and IODM join forces to tackle Debtor Problem
Australian small/medium enterprises were awarded the dubious title of having the “Longest Debtors’ Days Outstanding In The World” in November 2016.
The Australian Government Small Business and Family Business Ombudsman – Kate Carnell described this problem as the “Silent Killer Of Modern Business”.
The Ombudsman has indicated that she will be having discussions with government departments and big business about improving their payment histories with small/medium enterprises.
Whilst this is commendable Peter Towers, Managing Director of ESS BIZTOOLS and Damian Arena Managing Director of IODM believe there is another very important issue and that is that many small medium enterprises have not implemented appropriate systems for Debtors’ Control nor have they implemented State-Of-The-Art Debt Collection Practices which will both contribute to a significant reduction in Debtors’ Days Outstanding.
Peter Towers said, “The international research conducted in over 80 countries indicated that Australia’s Debtors’ Days Outstanding was 26.4 days beyond the traditional trading period of 30 days making Debtors’ Days Outstanding in Australia an average of 56.4 days”.
Damian Arena said, “Most small medium enterprise operators have always found debtors’ monitoring and collection a thankless task and because of that many of them have ignored debtors monitoring and collection leading to a significant rise in Debtors’ Days Outstanding”. “The IODM system eliminates the need for significant time to be spent by management and team members on monitoring and collection tasks as the system generates reminder SMS messages or emails and if the debt is not paid on the due date follow-up messages are automatically generated without the need for input from management or a team member of the business” Damien Arena said.
“There is a significant role for accountants to play in undertaking a due diligence review on Small Medium Enterprises Debtors’ Systems and developing a written customised Debtors ‘Systems Manual to guide the team member in the client’s business who has the responsibility for administering debtors” Mr Towers said.
Authorised for release
Peter Towers, Managing Director, ESS BIZTOOLS
Damian Arena, Managing Director, IODM
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