THE EXPERIENCE of Melbourne-based FinancePath is that the relatively new trend of utilising ‘finance apps’ to guide personal – and sometimes small business – finance is becoming akin to “your unused gym membership”.

According to FinancePath director and general manager Chris Collard, “far too many” business people are migrating to finance apps only to fail to use them properly to drive positive personal and business outcomes. In fact, the whole process has been found to place people under unnecessary stress. 

“It seems everywhere we turn there is media commentary regarding interest rates, how the banks are managing the changes in regulations and opinion around a potential property bubble,” Mr Collard said. “This commentary varies depending on the opinion or the ‘spin’ of the author. It’s no surprise we are all confused.”

Mr Collard said an Australian Securities and Investment Commission (ASIC) study had found about 30 percent of people found dealing with money “stressful and overwhelming”.

The Australian Financial Attitudes and Behaviour Tracker, published by ASIC in December 2014, suggested this saturation of information combined with “our increasingly busy lives” has led to a spike in the use of personal finance apps as people look for answers in trying to make sense of their own personal situations.

“Whether it is the likes of Pocketbook, Money Brilliant or My Prosperity, people are turning to these smart finance apps as a source of information as they endeavor to take control of their money,” Mr Collard said. “These apps aim to assist you to, one, track your day-to-day spending and, two, compare how much you have coming in and going out.”

Mr Collard said second only to gaming, finance apps were the fastest growing category in the Asia Pacific region.

“People are continuing to turn to these apps for convenience and ease as they seek simpler ways to gain insights to allow them to make smarter decisions with their money,” he said. “This is a great first step in getting control back, however simply downloading a finance app will only provide you nice looking graphs, unless you do something with the information.

“Just as jumping on scales alone won’t help you lose weight, simply joining a gym won’t get you lean and fit.”

Using the gym analogy, Mr Collard said many people who are not getting results themselves from self-organised exercise discovered they did make progress when they engaged with a trainer or a coach.

“The challenge with getting the most out of these apps is maintaining motivation and accountability,” Mr Collard said. “ Just like a personal trainer can assist you to put together a workout plan and keep you disciplined and accountable, it is important to identify what you are working towards and how you are going to take the next step in your financial fitness journey.”

It is the experience, knowledge and energy that counts most in finance, too, Mr Collard argued.

“Let face it few of us find budgets motivating. We want something just that little bit more inspiring,” he said, recommending most people do best from engaging a ‘coach’ or mentor.

“So, make sure the app can set and track goals and then ensure you have the support of a partner, financial professional or a mentor that you trust who will help keep you motivated and accountable,” Mr Collard said.

“Remember although this information can be useful, with no focus on a plan or a change in behavior, finance apps can quickly become the finance equivalent of your unused gym membership.”

Mr Collard has prepared a detailed analysis of finance apps and come up with what he believes are the top three available for Australians.

www.financepath.com.au/blog/australia-s-3-best-finance-apps-and-online-tools

*FinancePath is a member of the 2017 Executive Leaders group of Victorian Leaders, the organisation inspiring and developing the next generation of leading Victorian companies.

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DIGITAL transformation and change expert, Gus Balbontin will detail his experience surviving massive disruption at an international Chartered Accountants forum in Sydney.

As the former executive director and chief technology officer of Lonely Planet, Mr Balbontin was responsible for helping the business transition from print to digital. 

At Business Forum 2017, which is being run by Chartered Accountants Australia and New Zealand (CA ANZ), he will deliver a special presentation on responding to the challenges of disruption and change.

Mr Balbontin will explain how businesses can adapt and do things differently, while gaining a competitive advantage.

“Kodak sold film and they missed Instagram," Mr Balbontin said. "They should have come up with Instagram. Kodak’s aim should have been to capture life and share life, not sell film."

CA ANZ’s head of education, Jeana Abbott, said, “We are looking at how you harness the power of purpose to differentiate your business.

“As part of that, we’re focusing on the future. Our experts will lead discussion on maintaining your purpose, while managing emerging issues and technology.

“It’s about overcoming challenges, reshaping your understanding of problems and solutions, and how you go about fixing those problems.

“Technology is changing the way we do business and it’s vital to be flexible and know how to adapt in a changing landscape," Ms Abbott said.

“It’s something all organisations are dealing with, including CA ANZ.  That’s why we launched our CA Kairos innovation initiative, giving our members skills, and tools, to access big data in a meaningful way.

“It combines work streams, systems and platform to help save time and give SMP Members access to meaningful insights, leading to better conversations and more reliable predictions for their clients.

“This is the time that all businesses need to be focused on change, to ensure their adaptability.”

Hundreds are expected to attend the two-day forum which will be held in Sydney on June 5 and 6, and in Auckland on June 8 and 9.

Chartered Accountants Australia and New Zealand represents 119,000 financial professionals.

charteredaccountantsanz.com/businessforum

#businessforum17.

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THE Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has called on the Australian Government to legislate to set a maximum payment time for big businesses to pay their small business suppliers.

The ASBFEO recently released findings from its Inquiry into Payment Times and Practices in Australia.

The Inquiry found widespread evidence of a growing trend for Australian and multinational companies to delay and extend payments to their suppliers with typical payment times of 30 days moving out to 45, 60, 90 or 120 days. 

“Extending payment times for suppliers effectively uses the businesses in the supply chain as a cheap form of finance," ASBFEO chief executive Kate Carnell said.

“Something must be done. Small business should never have to act as a bank for big business, helping to finance multinational companies.

“This growing trend for extended payment times impacts the economy by slowing down the flow of cash through supply chains, which limits growth of businesses because they have more capital tied up in financing their operations and it raises the costs for businesses financing longer trade credit to their suppliers.

“When a business experiencing extended payment times is also hit with late payments, it stresses the business further, which can easily put them out of business. Poor cash flow is the primary reason for insolvency in Australia.”

The key recommendations of the ASBFEO Payment Times and Practices Inquiry are:

• The Australian Government to introduce legislation to set a maximum payment time for business-to-business transactions. Terms greater than this can be agreed when it is not grossly unfair
• The Australian Government to adopt a 15 business working day limit on payment terms from July 2018
• The Australian Government to introduce legislation for large business to disclose publicly all of their payment terms and performance against those terms
• The Australian Government to procure from businesses which have supply chain payment practices equal to or better than government terms.

Ms Carnell said the Australian Government needed to legislate a maximum payment time to set the standard on what was considered an appropriate upper limit on payment times for businesses operating in the Australian economy.

“Terms greater than this can be agreed by both parties to meet specific industry needs, however, where longer terms are called into dispute they may be considered to be an unfair contract term,” she said.

Ms Carnell welcomed the proposal for a voluntary industry prompt payment code although overseas experience clearly showed that voluntary measures did not compel all businesses to change their practices on extended payment terms or late payments.

She said although voluntary codes had been shown not to be entirely effective, minimum best practice would require a code to define a maximum payment time and contain a mechanism to automatically apply late payment penalties either through interest measures of other forms of compensation.

Also, minimum best practice would require regular, independent and public reporting to determine its effectiveness.

The Payment Times and Practices Final Report also recommends that the Australian Government maximise its role to set the standard on faster payment times to suppliers.

The ASBFEO recommended that the Australian Government adopt a payment term limit of 15 business working days by July 2018 to set an example for faster payments to suppliers.

Ms Carnell said the standard government payment term was 30 days and a study in the United States had demonstrated that faster payments through supply chains had increased annual payroll by $6 billion and created more than 75,000 additional jobs over three years.

She said that despite government prompt payment policies some government entities paid their suppliers late and many suppliers did not seek a late payment penalty for fear of antagonising the government entity.

The State Small Business Commissioners will also progress discussions on the Report’s recommendations with their respective governments.

An ASBFEO survey conducted as part of the inquiry found:

• Around one in two respondents reported more than 40 percent of their invoices were paid late last financial year
• Almost half of businesses have more than $20,000 owing to them from late payments and 14 percent of businesses have more than $100,000 owing
• More than half of respondents said that large/multinational businesses “always” or “frequently” make late payments. Twenty-one percent of respondents said Australian Government departments and agencies “always” or “frequently” make late payments.

Ms Carnell said that behind the economic harm done to small-to-medium businesses from late payments there were adverse impacts on mental wellbeing through stress, anxiety and impacts on families.

www.asbfeo.gov.au 

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