Payment issues to the fore as economic crunch bites

Maintaining customers is essential during rough economic times, but payments due to a transport firm must also be met, otherwise a company can no longer meet its own expenses – a lesson, or rather a balancing act that is well known to Sharp Freight. From its base at Swaziland’s Matsapha Industrial Estate, Sharp Freight moves goods into Africa, having recently expanded service into Botswana and Lesotho. “We are not suffering as a business because we are keeping our customer base,” said Jabu Vilakati, co-director of Sharp Freight with Shadreck Mnisi and Service Magagula. But collecting from customers come invoicing time has become a challenge, he said. “We have long-term contracts, and we give our customers credit agreements. Payment is due in 30 days, but we find some customers roll it over to 60 days, even 90 days. You have to be patient, but some customers take advantage of that patience,” Vilakati said. Meanwhile, unpaid bills mean less funds to operate a multi-national road transport business. “Clearing and forwarding is a challenging business at the best of times. But this year we have economically challenging times, and some customers aren’t paying,” Vilakati said. Sharp’s stock in trade is the transport of general cargo. Recently, its Super- Link trucks have been moving scrap metal into Africa. Raw materials manufactured in Swaziland for the local garment industry are transported to textile factories in Botswana and Lesotho. While cost-cutting is an essential strategy, said company co-director Mnisi, it is important to keep an eye on the horizon and implement capital improvements, such as a new warehouse that Sharp will construct as it expands its Matsapha site.