One of the most significant challenges for small- and medium-size enterprises (SMEs) is the two-fold problem of access to investment financing and business support.
Nick Hough, debtor finance business development executive for Sasfin Commercial Finance, says that while SMEs are major contributors to the SA economy, the more business conditions improve the worse cash-flow and credit-control problems become.
"Sales increases require more raw materials and more cash to fund new orders. As the customer base grows, so does the outstanding debtors' book.
"As a result, management has to spend more time on credit management and collection of unpaid invoices than on running their business."
Hough says the key to success for SMEs is maintaining a good flow of cash throughout the operating cycle, enabling payment to suppliers, staff and other creditors.
