As globalisation makes the world into a smaller place, competition increases, and competitors can now come from anywhere. Australian businesses now need to compete not just locally but internationally. Your business is now exposed to competitors who have established themselves on the other side of the planet.

Gone are the days where our sole concern is a competitor opening up on the same block!

The exponential increase in global competition is sending shockwaves through different industries. A perfect example is the retail industry in Australia, which has been significantly impacted due to the online shopping revolution. Many of Australia’s largest retailers have successfully adapted to the aggressive global market, while others have been less successful.

In order to keep up with your new international competitors you may need to revamp your product offering, adjust your pricing, improve the efficiency of your business processes and operations, potentially even invest in a brand new online platform or ecommerce solution. For many Aussie businesses, the immediate effect of all these ‘adaptations’ is an increase in cost and significant reduction in margin. It’s a business’s ability to handle these adaptations and the temporary financial strain that is the difference between success and failure.

Handling your businesses cash flow cycle is key to weathering the storm. To use another cliché, ‘cash is king’, and with the correct structures in place you’re poised to adapt and take your business to the next level.

There are a number of key considerations that need to be made in order to have the correct structures in place, including:

Customer Terms:

If your product or service is difficult to differentiate from those of competitors, then you need find a way to differentiate. One way to do this is to compete in way other than your product offering, for example by offering your customers more flexible or longer payment terms than the competition. There are certain types of cash flow finance that support businesses offering terms to their customers, thereby allowing you to offer your customers the best terms available whilst mitigating any impact on your businesses cash flow. Alternatively, you might find some customers are paying you on 90 or 120 days, and that the cost of borrowing this money for that time period erodes what margin you have left. These customers may not be worth selling to!

Minimising Bad Debts and Underwriting:

Understanding who you should and shouldn’t offer terms to is crucial. This is not necessarily an easy distinction to make and you’ll often not have the knowledge base or support systems in place to help you make this distinction. Strengthening your business with credit reporting services is an effective way to mitigate any risk involved with certain customers. Additionally, there are various forms of financial services that help you track your customer’s payment performance and stay on top of your receivables.

Operational Costs:

The technical advancements that brought international competitors into the Australian market also brought with it technologies that enable businesses to streamline operational processes and systems.

There are a number of services that specialise in managing business operations. For example, online payroll systems that bolt on to accounting system now exist and have cut down relative expenses by significantly reducing the man hours necessary to complete the job. Using these services is a great way to mitigate unnecessary financial expense and also the headaches associated with the mundane tasks needed to keep a business running smoothly! The actual direct cost may be higher, but the hours you and your staff save can more than make up for this.

Finding the right suppliers for your business:

It’s not all about price. Sometimes a better product may be more expensive but make you more money in the long run.

Having suppliers supporting your business that aid you in delivering a better product or service to your customers are incredibly valuable. It’s important that you look to partner your business with suppliers that are understanding of your vision and growth plans and will work with you to achieve that vision. These suppliers may come in the form of wholesalers, accountants, legal advisers, financial services providers, recruiters, or subcontractors. If your suppliers share your vision they’re likely willing to work with you to structure your payments in a way that suits your businesses cash flow.

Much in the same way you’re offering terms to your customers, you should do your best to obtain terms from your suppliers.


Until relatively recently financial products on offer to businesses have been largely static in nature. Financial solutions that are equipped to grow and contract in line with your businesses financial needs are becoming more viable and prevalent.

Traditionally, businesses establish an overdraft with a bank if they’re in need of a cash injection. Bank overdrafts have a fixed limit which is not tied in any way to the performance of your business (realistically, it’s likely tied to the bricks and mortar security available in your family home!).

Financial solutions such as debtor/invoice finance extend more funds as you increase sales and also contract in line with low sales periods – thereby minimising borrowing costs and facilitating your business appropriately when in need. Again, as was emphasised in the ‘finding the right suppliers for your business’ section, having the support of a financier that will grow along with your business is priceless. A financial provider that sees their relationship with you as an investment instead of a sale is invaluable.


Moneytech is an Australian commercial finance organisation specialising in Trade Finance (Credit Express) and Debtor Finance (Confirmed Capital). We aspire to become trusted partners of our customers.  We support their growth by both understanding their business, and creating innovative financial products based on their feedback which fulfils their needs. Continue to our web site to learn more, or call us on 1300 858 904.