Cash flow is one of the most important indicators of business health. Even profitable businesses can struggle if they are unable to meet payment obligations when cash inflows are delayed.
CCIWA’s analysis of ASIC data indicates that insolvency rates in Australia have been climbing, exacerbated by higher interest rates and persistent inflation.
Cash flow problems appear to be a common denominator among failing businesses.
CCIWA Senior Trade Consultant & Austrade TradeStart Advisor Darren Levy says credit, currency and working capital risks all funnel into cash flow.
“Think of cashflow like a beating heart. If credit risk goes unmanaged, you’ll be waiting on payments that might never arrive,” he says.
“If currency risk spikes, costs can blow out unexpectedly. If working capital runs thin, you can’t plug the gaps. All roads lead to cash flow.”
Finance tools to maintain liquidity
While the fundamentals of invoicing discipline, prompt collections and controlled spending remain non-negotiable, there are specific banking tools that can help (contact your bank to find out more):
Online trade banking systems
- Enables businesses manage multiple international transactions and track invoices in one place.
- Provides real-time visibility into outstanding payments, currency fluctuations and upcoming obligations.
Flexible payment terms and early settlement discounts
- Offering a small discount for faster payment can encourage international clients to settle quickly, boosting cash inflow.
- Conversely, negotiating with suppliers for slightly extended terms can help match your outflows more closely to your inflows.
Short-term overdraft facilities
- A quick-access safety net for bridging small, unexpected cashflow gaps.
- However, must be used strategically as interest rates remain elevated.
CCIWA suggests scheduling periodic reviews where key stakeholders – finance, operations and sales – to assess your company’s liquidity over a three, six and 12-month period.
This forward-looking view allows them to forecast potential shortfalls and lock in any relevant finance solutions before a crisis hits.
Related reading: trade finance risks
- How to manage credit risk in international trade
- Managing currency risk: how to protect your profit margins
- How to manage working capital when trading internationally
More resources
Planning for stronger resilience
The economic outlook for WA businesses is optimistic despite global uncertainty, according to CCIWA’s half-yearly March Outlook report.
Businesses that proactively monitor and manage their cash flow are better positioned to recover from external market disruptions and economic volatility.
Strengthen your cash flow management with these practical tips:
- Review and align payment terms with both customers and suppliers.
- Use alert systems to track late payments and reduce administrative oversights.
- Forecast liquidity for the next three to 12 months, with regular cross-team check-ins.
- Explore short-term finance tools like overdrafts or invoice discounting to bridge gaps.
- Monitor risks holistically – currency, credit and working capital – as they impact your cash position directly.
If you are looking for support or advice in business, investment or trade, contact our experienced International Trade Services team at [email protected].
