With Renminbi (RMB) payments growing each year amongst Australian businesses, it is little surprise that Australia’s annual exports to China last year totaled over $92 billion.
That said, these transactions will come to a grinding halt between 30 January to 5 February as China celebrates their New Year (or Spring Festival Golden Week Holiday), during which time no payment processing can be executed to China, Hong Kong (31 January 2014 – 3 February) and Macau (31 January – 2 February).
What does this mean for Australian businesses with Chinese suppliers? It means it is time to get organised. So if your business regularly transacts with Renminbi, these tips may help prepare ahead of this busy season.
Pencil it in
Many in Australia may not be aware of the exact dates of the Chinese New Year holidays, which vary from year to year. It could be helpful to set a note in your calendar for the duration of the Chinese New Year, set up reminders on your phone/email or even just stick a post-it note by your desk in your work-space.
Request early
Don’t wait – settle RMB invoices prior to the Chinese New Year to avoid potential late payment fees and the broken contracts that can be associated with set payment dates. If you export to China, it may be advisable to request payment from Chinese trading partners before 31 January, or plan ahead of time to receive funds after 5 February in order to avoid potential cash flow issues.
Make some Chinese New Year resolutions
Use this hiatus to reflect on new systems and processes for you and your Chinese trading partners. After all any improvements you can make to your procedures and relationship will have a positive effect on your bottom line.
Happy Year of The Horse!
About the Author
Adam Howard is the Commercial Director at Western Union Business Solutions.
