Cash Down The Black Hole

Recently both Rio and BHP have extended their payment terms to suppliers.  That’s all suppliers.  This means any downstream business that suppliers goods or services to the mining industry is about to experience some cash-flow pain.  Why?  Well, here’s how it will work out.  Imagine you are sub-contracting to one of these mining giants, or in fact to a larger supplier.   Both miners are now paying their invoices at 60 days from the ‘end of the accumulation period’.   If you don’t know what that means, it’s simply ‘from the end of the month’.   So, effectively an invoice issued on the 1st of April will not be paid until July 31st.  How’s that for an April Fools Joke!!   Waiting up to 90 days for payment whilst still meeting supplier, wages and rent commitments can kill small businesses.   There is help at hand though.  If you’ve never thought of it,  Debtor Finance is the answer.  You can read more about it here.   Contact us to discuss what options are available.

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