I’ve been running my small business (Masalai Communications) for 13 years now and half the difficulty in business is getting paid when you expect it, because this in turn affects how fast you can pay your own bills and way before you can start looking at investing in the growth of your business.
Now something came across my attention tonight while surfing the web and maybe the Bank of PNG, PNG Business Council and other Trade support organisations could look into this too. So in the US, Obama has introduced the ‘Supplier Pay‘ initiative. The program, which also includes a financing component, is essentially an agreement by companies like Apple, Nissan, Rolls Royce and more to pay its small business suppliers faster — so that they can reinvest funds into growth.
‘SupplierPay’ requires federal agencies to pay small businesses within 15 days. SupplierPay applies this to the private sector, where manufacturers will fork over cash quicker to suppliers and investment companies will help them get lower-cost capital.
Basically, this is an attempt to get companies that can afford it to return cash flow to small or ‘diverse’ businesses quicker to let them spend that money, rather than it gathering interest in the coffers of a company like Apple.
Imagine what wonders it could do for SME’s in PNG.
In addition to this we would also need the Banks to do away with these 7 day clearance processes, it again hinders business. If fraud is an issue than get prior clearances from the payees and payers so that the bank already knows the parties involved in the transactions to clear the payments faster.
Cash flow is the life blood of small businesses and it doesn’t help when the hurdles to business actually have nothing to do with your business in the first place.