Australian small businesses are the backbone of our economy, responsible for 60% of GDP and 20% of all employment.

Innovation has enabled SMEs to behave like larger companies in many industries, but there is a problem the small business community faces. ASIC thinks this is the #1 reason for failure of SMB; poor management of cash flow.

A new report released by Xero shows that over half of all trade credit invoices to SMB’s are paid late. Pencil, a new startup business, is addressing the problem head-on, by providing suppliers with a faster way to receive payment from customers.  Early signs indicate that the collection of invoices with Pencil is quicker, with a staggering 17% rise in money gathered.

Suppliers and small businesses see more than just the financial benefit of greater cash flow. Founders Tim Demetriou and Greg Armstrong talk about the opportunity in trade credit:

You will find that the most valuable items for business are time and peace of mind. We streamline (previously) time-consuming processes and give Suppliers time & clarity to make business decisions.

The Federal Government is starting to put pressure on larger companies to pay their bills on time. Prime Minister Scott Morrison lately chimed in saying;

Chasing late payments is the most common type of legal dispute that founders find themselves in,
with the cost of resolving these late invoices costing into the hundreds of thousands of dollars.

Pencils platform lays out a simple process for businesses to communicate more efficiently with its customers, therefore speeding up cash flow.

Tim Demetriou describes the solution as;

Preventing the collections domino effect from consumer to small business to supplier. Helping firms keep a speedy, consistent flow of cash allows for growth and customer retention. We regulate payments over the month, removing lumpy cash flow.

Business owners and employees can put time and concentration in running their company rather than spending precious time on collections by addressing this significant problem so many of them face.