AUSTRALIAN printers, at the end of a line of debtors, are increasingly being left with unpaid accounts and many in the industry forecast a further decline.
The June 2005 Printing Industry Quarterly Business Analysis compiled by the Printing Industries Association of Australia identified a 15.2% increase in the number of printers reporting outstanding debtors compared to the previous quarter.
Add that to the reported downturn in selling price and rising production costs and printers may face financial restrictions which significantly limit their capacity to operate, unless measures are taken to make cashflow management a higher business priority.
Bibby Financial Services Managing Director, Greg Charlwood, said that debtor finance gives printers cashflow protection during market fluctuations and seasonal peaks and troughs.
"The December quarter is a traditionally busy period for the printing industry, with annual reports and the general rush to finish things off before Christmas," Charlwood said.
"However, it's a catch 22 for many as the increased output does not always equate to better cashflow - at least not in the immediate term."
Recent figures put out by Dun & Bradstreet show that trade debts generally have slowed to eight weeks, up from seven weeks a year ago.
A problem for many small businesses is that their big corporate customers are often the most lucrative but tend to be slow payers because of the approval processes and timing of cheque runs.
Smaller operators generally need access to the funds sooner but very much want to retain their customers by being flexible with credit terms.
Another significant issue for printers is that they are often the last in a line of suppliers for payment - after designers, typesetters and print brokers. While their client may be the designer, payment may be coming from further afield which can cause considerable delays.
Charlwood, who is also the outgoing Chair of the Institute of Factors and Discounters Australia and New Zealand (IFD) believes that in an unpredictable trading environment, securing finance to overcome late debtor payments is vital to ensuring the survival and success of small to medium sized businesses.
"In an uncertain trading environment a steady cash flow is essential to business success," Mr Charlwood said.
"Printing bills tend to be relatively high dollar amounts. Even just a handful of late payments can cause real problems for small printing companies with overheads to meet.
"Factoring or invoice discounting takes the pressure off cashflow allowing the business to keep moving, even if customers are slow to pay.
"We keep the balance for our clients so they can get on with the job of running their business."
Factoring and invoice discounting are flexible cash flow finance options that fund businesses up to 90% of the value of outstanding invoices within 24 hours. This allows a business to access the funds tied up in unpaid invoices rather than waiting the average 90 days for payment.