Australian SMEs struggle with cash flow & profits drop

A survey conducted by CommBank has revealed that nearly 80% of Australian small to medium businesses faced cash flow challenges over the past year.

The research identified declining revenue as impacting cash flow for 35% of these businesses, while 30% were affected by low cash reserves. Seasonal fluctuations were cited as a problem by 27% of respondents.

In response to these issues, 85% of businesses have employed various strategies to address cash flow difficulties. Reviewing or decreasing expenses was a tactic used by 34%, while 27% maintained a cash reserve. Other strategies included finding additional revenue streams and increasing sales or pricing, which were utilised by 26% and 25% of businesses, respectively.

Despite these efforts, more than a quarter of Australian small businesses have resorted to using personal savings or foregoing personal salary payments in the past year, illustrating the extent of the financial pressure on these businesses.

To support Australian small business owners in managing their cash flow more effectively, CommBank has partnered with the AGSM at UNSW Business School. They are offering a complimentary course focused on cash flow management to those interested in improving their financial acumen.

These findings highlight the critical need for effective cash flow management among Australian small to medium businesses. By equipping business owners with the right tools and knowledge, initiatives like the complimentary course from CommBank and the AGSM at UNSW Business School offer a valuable opportunity to strengthen financial stability and resilience, paving the way for long-term success in an increasingly challenging economic environment.