How labour hire organisation Impact Services minimises cash flow risk to maximise impact

At the time, Stuart Roberts, a Menang man from Great Southern and a leader in Aboriginal community development, teamed up with Stephen Quain, then a manager for a labour hire and group training business.

They combined their expertise, initially providing labour hire services to head contractors on government projects like buildings, schools, and roads. Then, nearly two years ago, Impact Services won a bid with Workforce Australia to provide employment services to people across northern Perth.

Impact Services’ Chief Executive Officer, Kerry Fry, says the organisation exists to enhance people’s lives through employment, entrepreneurship, and self-determination. Through its three divisions – employment services, labour hire and contracting services – it estimates over $129m in economic value has been generated from its activities.¹

This economic value is based on positive benefits of finding and creating jobs, including the impact of better health outcomes, lower Centrelink dependency, and the flow-on effect of good role models.

“Our purpose is to get Aboriginal people into employment and recruitment and provide an opportunity for a sustainable career path, but we cater to all people,” Kerry says.

Getting cash flows in sync

Kerry, a chartered accountant with an insolvency background, says she is passionate about business. She’s committed to fostering a professional, performance-driven culture that can maximise Impact Services’ benefit to the community.

To ensure operational stability and growth, Kerry has a focus on managing cash flow risk. This includes ensuring the business can always pay its growing workforce while waiting for customer payments.

“Cash flow timing risk is a big issue for a business like ours. We work with many large organisations, and while we pay our employees weekly, we may not receive payments until six to eight weeks later.”

“We’re paying hundreds of thousands of dollars then managing a large cash draw over the period, and then all of a sudden, the business is flush with cash again.”

To help smooth out mismatched cash flow cycles, Impact Services uses CommBank’s Stream Working Capital solution. Stream Working Capital can unlock the value of selected invoices and provide Impact Services with the working capital it needs to meet day-to-day expenses.

Stream Working Capital is a digital cash flow solution with a self-service platform that connects to your eligible accounting software. That means your Stream Working Capital account is reconciled as invoices are paid with no manual input, and repayments are adjusted to match with a real-time view of your balance. It allows businesses to access up to 80% of the value of outstanding invoices without any additional loan security.

Managing payment risks

Kerry explains that Impact Services’ customer base is diverse. It works with businesses of all sizes and frequently brings on new clients. She says that means debtors can have varied risk profiles.

“We always run due diligence and credit checks on new clients, but there’s never a guarantee they will be a good fit or adhere to your credit terms,” Kerry says. “What I liked about Stream is that we could select which parts of our debtor book we were comfortable to borrow against.”

Kerry says that this provided flexibility to scale the Stream Working Capital balance up and down. “Larger, long-term clients often have a higher number of hires which can drag on cash flow, but they are fantastic payers.”

“With new clients, we take on more risk, but as they become proven payers, we can add them to the Stream Working Capital account. Stream Working Capital also monitors the concentration among debtors to ensure we’re not overexposed.”

“The Stream Working Capital online platform makes it easy to nominate clients within your debtor book to secure against,” Kerry says, adding that it links with Impact Services’ accounting software, providing a single and timely view.

“It’s very easy for me to go to online banking, connect directly to the Stream Working Capital account and have a single picture of our cash flow and available credit linked to our debtor book.

Broader benefits

Kerry adds that as a CEO, part of her job is to protect the assets of the organisation. She says this is where Stream Working Capital helps, given credit is secured against the debtor invoices, not an asset like property.

“Rather than looking at assets, Stream Working Capital looks at the debtor invoices then provides working capital in order to manage cash flow. While it’s typical for recruitment businesses like ours to need help to manage cash flows, I see that loans secured against invoices can have a broader benefit,” Kerry says.

“It means that entrepreneurs building great businesses might have access to credit based on their track record, compliance, and customer base. That can provide an equal opportunity to compete and avoid the stress for those without property or that don’t want to risk the family home.”