In this engaging interview, Bruce Billson, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), sheds light on the unique challenges facing small and family businesses in the Northern Territory, emphasizing his role as an advocate and problem-solver for these enterprises.
As the ASBFEO, Billson’s primary mission is to provide guidance, mediation, and support to small businesses dealing with issues that can hinder their operations. His office addresses a range of disputes, but unpaid invoices are particularly prominent, accounting for nearly two out of every five cases they handle. Billson explains that many small businesses in the Northern Territory face tough economic conditions, where every dollar counts, and delayed payments can be critical to their survival.
Addressing Payment Disputes and Mediation
Billson highlights the delicate nature of resolving payment disputes, especially since many small business owners have ongoing relationships with the clients who owe them money. Simply “bringing in the heavy hands,” as interviewer Rick Hind puts it, isn’t practical or desirable, as small businesses often rely on maintaining these client relationships. Billson emphasizes his office’s commitment to achieving solutions that leave both parties satisfied, rather than creating a “winner” and a “loser” in the dispute. This approach is intended to preserve relationships and allow businesses to move forward without lingering resentments that could affect future work.
Legal action, particularly for small businesses, is usually unfeasible due to the high costs and lengthy timelines involved. Billson underscores that taking a matter to the Federal Court of Australia, for instance, could cost around a quarter of a million dollars and take up to two years just to secure a hearing. Instead, the ASBFEO focuses on mediation, aiming to resolve issues as quickly and amicably as possible to help businesses avoid costly and protracted legal battles.
To assist businesses with this, the ASBFEO website offers tools, including template letters for payment reminders and escalation procedures for cases where informal reminders don’t work. Billson’s office encourages “self-help” as a first line of action, empowering business owners to try handling disputes on their own before involving the Ombudsman’s office. If self-help fails, the ASBFEO can step in to provide additional support and facilitate a resolution.
Challenges with Digital Platforms
Billson also discussed the increasingly critical role that digital platforms like Facebook Marketplace play in the survival and growth of small businesses, especially those in remote areas like the Northern Territory. Platforms allow businesses to reach customers outside of their immediate geographic area, expanding their market to national and even international audiences. However, digital platforms come with their own set of challenges, particularly around security and account access. Billson describes cases where small businesses are hacked or locked out of their accounts, resulting in lost revenue and even unauthorized spending on scams. Such scenarios not only disrupt business operations but can also damage the business’s reputation with customers, making it difficult to regain trust and continue sales once the account is restored.
The ASBFEO office liaises with platform operators, including Facebook, though Billson notes that such companies have reduced their support presence in Australia. He mentions that some of their primary contacts are now based in Singapore, which has complicated efforts to get timely resolutions. Although his office does its best to get businesses back online quickly, the reality is that dealing with international tech companies often involves delays that small businesses cannot afford. Billson contrasts these experiences with the more practical advice he receives from host Rick Hind, who jokingly suggests taking a photo of friends with borrowed items to remind them to return them—illustrating how these everyday issues mirror the frustrations small businesses face in managing relationships and resources.
Concerns Over Business Solvency and Financial Instability
Another issue Billson identifies is the underlying financial instability that often accompanies unpaid invoices. Approximately half of the businesses that reach out to the ASBFEO about unpaid debts also express concerns about the solvency of the company they’re dealing with. This is especially relevant in situations where small businesses operate on credit, performing services or delivering goods with the understanding that they’ll be paid later. However, if the client is financially unstable, there’s a risk that the business will not get paid, potentially jeopardizing its own financial position.
To help mitigate this risk, Billson’s office advises business owners to check credit reference sites before committing to large projects. For example, if a contractor takes on a significant job for a developer, they can use these sites to assess the developer’s credit history and ensure they’re likely to pay in full and on time. Additionally, the Australian Tax Office (ATO) has started listing businesses with overdue tax debts on these credit reference websites, providing small business owners with a useful indicator of potential risk. In some cases, the ASBFEO suggests that businesses negotiate terms that protect them, such as requiring a partial deposit upfront to cover initial costs.
Asset Security and Practical Business Advice
Towards the end of the interview, Billson and Hind share a light-hearted moment discussing the challenges of securing assets, both in business and personal life. Using examples like tennis rackets and ladders that friends borrow and forget to return, Billson draws a parallel with small businesses lending valuable assets, such as scaffolding or equipment, to contractors who may go out of business. For small businesses, this issue can be a serious concern, as they risk losing expensive equipment to insolvency or debt disputes. Billson mentions that there are legal protections, like the Personal Property Security Register, which allows businesses to register their assets and help protect them from being seized or sold in cases where a client faces financial difficulties.
Resources for Small Businesses and Family Enterprises
Billson concludes by encouraging small business owners to visit the ASBFEO website (asbfeo.gov.au), which offers a variety of resources to help businesses address common issues independently. These tools are especially helpful for time-strapped small business owners who may not have the time or expertise to navigate complex disputes or legal processes on their own. The website includes information on dispute resolution steps, ways to mitigate risks associated with unpaid invoices, and guidance for working with digital platforms. Billson notes that the ASBFEO is always available for businesses that need additional assistance, serving as a valuable ally in their efforts to overcome challenges and succeed.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
