News that South Africa’s economy grew by 2.5 percent in the second quarter of 2017 was most certainly well received and beat economist expectations. The market expected growth of 2.3 percent while some meaningful analysts had the GDP growth forecast set at no more than 1.4 percent. While this could be the first meaningful sign that SA’s economy is on the mend after spending some time in the doldrums, for many SA citizens there seems, as yet, little to celebrate. Political uncertainty, high unemployment and junk status still remain on the agenda as inhibitors to our growth; while for those in the construction industry there is no good news […]

  Debtor financing houses, most notably controlled by South Africa’s biggest banks, have gone a long way over the past few years to rid the industry of the stigma attached to debtor financing. Yet, a number of credit extension professionals still view applications from potential debtors that have elected to finance their receivables as risky, according to Frank Knight, MD of Debtsource – a credit management outsourcing company. “Trade credit lenders are often of the opinion that debtor financing is a financing arrangement of last resort, and are therefore dubious of the liquidity of the business and their customer’s ability to settle accounts timeously.” Knight says that there can be […]

  Where your business’ accounts are concerned, profit and cash-flow are key financial measurements. However, many business owners aren’t aware that they are not directly linked, nor are they both equal measures of success. Profit is a measurement of a company’s sustainability on an ongoing basis, while cash-flow is a measure of a company’s ability to pay its bills when they are due. When there is a lack of cash resources, usually tied up in receivables or written off to bad debts, a company is vulnerable to failure, no matter what their perceived profit. Cash is the essence of a business and ideally, a business needs to generate enough cash […]

It’s been seen that time and time again the start of a new year can be a testing time for many South African businesses. January is almost always the leanest month for most companies as they cope with poor cash flow and increased outstanding debtors. Those reliant on client payments to boost their cash flow may be faced with account departments shutting down over December, causing payments to be later than ever before. The reality is that some businesses may have generated strong sales in November and December but they are not paid until February or March. That plays havoc with cash flow and means that financially, you’re starting the […]