Hong Kong’s small businesses were owed HK$13.339 billion last year due to late payments, finds Xero

A total of HK$13.339 billion worth of invoices were paid late to small businesses in Hong Kong in 2018, according to the global small business platform, Xero.
Xero’s data also found that last year:
– Only slightly more than half (56.04%) of total payments to Hong Kong small businesses were made on time
– 13.87% of invoices from Hong Kong SMEs worth a total of HK$7.885 billion are left unpaid
Kevin Fitzgerald, Regional Director – Asia, Xero said: “Unfortunately, dealing with late payments is part and parcel of running a business. If the money is tied up in late payments, small businesses struggle to maintain positive cash flow, raise the capital needed for investments and grow their business. Small businesses in Hong Kong are already being held back from growing and flourishing in the current trade environment, and it is likely to have a knock-on effect very soon, with business owners worrying about paying for basic expenses such as rent.”
With the US-China Trade War hitting Hong Kong small to medium enterprises (SMEs), and increased costs for cross-border trading, late payments are making it harder for SMEs to remain in business. Recent report reveals 81% of Hong Kong businesses are pessimistic about the trade negotiations, with 2019 recording the weakest start to a year over the past decade.
Small businesses that rely on trading with the US have to prioritize exploring new suppliers and customers. This could be the crisis that drives ambitious entrepreneurs to seek out new markets that aren’t affected by crippling tariffs but instead motivates SMEs to look further afield and seek growth elsewhere. The Hong Kong government is offering support to these businesses to overcome their financial challenges in the short-term – small businesses can receive a 20% higher credit limit of HK$5 million when doing business with US importers.
Another challenge to getting fluid cash flow is due to cross-regional payment processing roadblocks. Navigating China’s Cross-Border Payments, Opportunities and Challenges for Hong Kong Businesses survey recently conducted by American Express found more than half of all payments between Hong Kong’s small and medium-sized enterprises (SMEs) and mainland China, still use old-fashioned cross-border payment methods. These include telegraphic transfers (89%), cheques (67%) and banker’s drafts (61%).
Fitzgerald said, “Business owners should also consider using digital tools to record their transactions, which will make it easier to automate the invoicing process, and enable payment collection through platforms such as PayPal and Stripe. Overall, business owners get real-time visibility into their cash flow to foresee financial challenges, thus giving them time to access credit in advance.”
Small businesses that use Xero have been able to shorten the number of days between issuing an invoice and getting paid, from 42 days to 32 days.

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

Off-Chain vs. On-Chain Crypto Transactions: Which One Is Better?

Off-Chain vs. On-Chain Crypto Transactions: Which One Is Better?

Knowledge is power; when it comes to cryptocurrency, the more you know, the better financial decisions you will make. There is a lot to learn within the cryptocurrency space, such as how the different layers of blockchain technology work and which blockchain has the fastest transaction speed. Another important thing you need to know regarding blockchain transactions is the differences between off-chain and on-chain transactions—and which one can save you more money!

5 Essential Tricks to Master Microsoft Excel

5 Essential Tricks to Master Microsoft Excel

Microsoft Excel (MS Excel) is a must-have for any business. It is a powerful spreadsheet software application that allows users to store, organize and analyze data. While Excel is fairly easy to use, it can be tricky to become an expert. Don’t know where to start? We have compiled a list of easy-to-follow hacks that will help you become a pro at Excel!

Top Three Weirdest Mobile Game Advertisements

Top 3 Weirdest Mobile Game Advertisements

Whether on YouTube or Instagram, I’m sure you all must have seen at least one mobile game advertisement. One common trope with today’s mobile game advertisements is that they tend to mislead their audience.
You might have come across these weird ads while scrolling through social media: In the ad for the strategy game “Game of Sultans”, a sultan is fat-shaming his daughter; in the match-three puzzle game “Lily’s Garden” ad, women use washing machines as vibrators.

The Maximalist Fashion Trend Where Did It Come From and Where Is It Going

The Maximalist Fashion Trend: Where Did It Come From and Where Is It Going?

If you Google “maximalist fashion”, you will be swamped with dressing guides dedicated to this “the more, the better” trend published by leading fashion magazines in 2022. Rapidly gaining popularity in the last couple of years, maximalist styles are breaking out of the runway of an Haute Couture fashion show, a red carpet event or a K-pop performance to conquer streets in high fashion neighborhoods.

How Is Technology Influencing the Food and Beverage Industry

How Is Technology Influencing the Food and Beverages Industry?

Food waste, sustainability and animal cruelty are some of the biggest challenges facing the food and beverage (F&B) industry nowadays. Like any other sector, the industry is dipping its toe into technology and innovations to seek solutions. While we are already seeing more food tech solutions in our everyday lives, like plant-based meat alternatives and food waste management startups.