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What can Australian wineries do to improve cashflow?
Talking to wineries around Australia last year through the WFA’s WineSkills program, I heard the same question often: “What can I do to improve cashflow?”
This year that question is even more critical. Sales and margins are under pressure, customers are taking longer to pay their bills, while suppliers are pushing harder for payment. Many wineries are finding that cashflow is tighter, leaving their bank accounts looking less healthy.
In uncertain times cash is king. But the typical Australian winery is a cash-hungry beast, so tough economic times are felt more sharply in this industry than in many others. The faster and bigger they grow the more cash is required to support that growth. That’s broadly accepted.
The question is how well winemakers understand the simple things they can do to improve their cashflow performance.
In uncertain times cash is king. But the typical Australian winery is a cash-hungry beast, so tough economic times are felt more sharply in this industry than in many others. The faster and bigger they grow the more cash is required to support that growth. That’s broadly accepted.
The question is how well winemakers understand the simple things they can do to improve their cashflow performance.
Michael Ford calls for a Prompt Payment Principle
Australia needs a Prompt Payment Practice as part of the economic stimulus package, business growth expert Michael Ford has told an CPA Australia seminar. “For businesses to survive the downturn, the best thing the Australian governments could do is to pay them promptly, and ensure prompt payment down the line,” he said.
“Already many government bodies must pay their bills promptly. There should also be clauses requiring or encourage prompt on-payment in all stimulus package contracts. That increases predictability of cash flow, the life blood of small business, in a most uncertain time.”
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