Business Finance Archives

Trade Finance helps toy retailer overcome seasonal cash flow challenge

Posted on February 18, 2025February 20, 2025 by Russell Walsh

For any retailer, especially an online toy store, the festive season is both a major opportunity and a significant challenge. This was the situation one rapidly growing Australian toy retailer experienced. With a sharp increase in customers rushing to purchase the latest toys, cash flow pressures threatened their ability to make the most of this key time of year.

The solution came in the form of working capital finance from Octet. This strategic partnership not only helped the retailer manage cash flow during one of their busiest periods but also laid the foundation for future growth.

Cash flow struggles due to seasonal demands

Like many online retailers, this business faced seasonal cash flow challenges, particularly leading up to Christmas. While demand surged, the retailer struggled to balance inventory needs with slow customer payments, often finding themselves in a cash crunch. This left them unable to pay suppliers on time or invest in stock to meet growing demand.

The toy industry operates on thin margins, especially during peak periods. Stocking popular brands requires significant upfront investment. With much of their revenue tied up in pending orders, the retailer lacked the cash flow to cover these costs. They were stuck waiting for customer payments, limiting their ability to purchase new inventory and capture additional sales.

Further, the need to pay suppliers upfront to secure competitive pricing added more pressure. This made it difficult to maintain strong supplier relationships which could result in the retailer missing out on sales and failing to meet customer expectations. With the holiday season fast approaching, they needed more financial flexibility to navigate these challenges or risk losing out on the busiest time of the year.

Tailored Trade Finance helps manage cash flow

Recognising the urgent need for more working capital, the retailer reached out to Octet for a solution. Dan Verdon, Director of Working Capital Solutions – NSW, worked closely with them to understand their unique cash flow needs and challenges. After reviewing their business model, Octet proposed structuring a $2 million Trade Finance facility for their specific circumstances.

“Once we understood the business and their challenges, we knew they required a tailored solution that gave them the breathing room to meet customer demands without worrying about cash flow,” says Dan.

With Octet’s Trade Finance facility, the retailer gained quick access to funding, allowing them to purchase stock ahead of the holiday season, including high-demand items. The flexibility of the arrangement enabled the retailer to pay suppliers on time and unlock inventory without delay. They could now focus on meeting customer demand, rather than scrambling for funds or dealing with tight cash flow cycles.

A partner to support growth of the business

The benefits of working with Octet were immediately clear. Not only could the retailer fulfill orders on time and restock popular toys without delay, but they were now also positioned for long-term, sustainable growth.

“By utilising Trade Finance, the retailer gained better control over cash flow, providing the stability needed to scale operations without worrying about running out of cash,” explains Dan.

With Octet as a trusted financial partner, the retailer gained the confidence to expand their product range, explore additional sales channels and pursue larger growth opportunities.

Power your growing business

If your business is experiencing cash flow challenges or you want to capture new opportunities for rapid growth, Octet empowers businesses across a range of industries, including retail, wholesale, and online sales. We work successfully with Australian businesses facing these same growth challenges every day, providing innovative Trade Finance and Debtor Finance working capital solutions, paired with market-leading supply chain finance technology.

Speak to our team of working capital specialists to see how we can power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Supply chain management issues and challenges: what lies ahead in 2025

Posted on January 13, 2025January 22, 2025 by Russell Walsh

Resilient supply chains are critical for business continuity. However, with global challenges intensifying in 2024, businesses head into the new year facing an ever-increasing list of potential risks to their sourcing and inventory strategies.

The COVID-19 pandemic highlighted critical vulnerabilities in supply chain operations, pushing companies to prioritise risk management as a strategic advantage. However, several years later, FTI Consulting research shows that nearly 40% of companies need greater contingency plans for supply chain disruptions.

So, what now? In this article, we explore the key global and local supply chain management issues and challenges projected for 2025 and provide strategies to enhance supply chain resilience now and into the future.

Key events creating supply chain issues in 2025 and beyond

So, what are the major local and global issues likely to impact supply chains and business operations in 2025? Let’s explore them.

Elections and summits

November brought significant global events with far-reaching implications for supply chains. The G20 summit prioritised social inclusion, global reform and sustainability, while COP29 reinforced international efforts to combat climate change. In addition, it’s still unclear how the re-election of Donald Trump in the US, and his “America First” policies, will affect trade around the world.

These events will undoubtedly create global supply chain challenges and opportunities. As we approach 2025, uncertainty looms over the impact of anticipated new tariffs, trade barriers, regulations, labour laws and environmental standards, posing both challenges and opportunities for supply chain managers worldwide.

Conflict and tension

2024 was marked by ongoing conflicts in the Middle East and Ukraine, trade disputes, geopolitical tensions and sanctions. Supply chain managers are bracing for more of the same in 2025.

Several key geopolitical flashpoints are located near critical shipping chokepoints, including the Suez Canal, the Straits of Taiwan, and Malacca. The absence of a unified US foreign policy has left no framework for mitigating or resolving these tensions. Combined with the growing nationalism of China, Russia and India (which has a trade agreement with Australia), conflict and tension are set to increase.

Economic uncertainty

Inflation, currency rate fluctuations, and changing interest rates are critical global issues affecting supply chains. These economic issues make it challenging to predict pricing and maintain profitability, and they are expected to persist well into 2025 amid global uncertainty.

2024 was the year of elections, with voters in more than 70 countries going to the polls. How these elections affect supply chains is still to play out, but election-driven policies can increase or decrease demand in certain industries. 2025 will undoubtedly be a year of economic uncertainty for many.

Climate change and weather events

Weather is forecast to be a key challenge of supply chain management in 2025. Economist Impact reports that a billion-dollar weather event (an event that causes US$1 billion in damages) occurs every three weeks. Forty years ago, a billion-dollar weather event happened every four months.

Extreme weather, climate change and environmental challenges increasingly disrupt supply chains, affecting the availability of raw materials, production and warehousing. Weather and climate events can disrupt transport routes, force factories to close, destroy crops and hamper manufacturing. Consumers concerned about climate action are also putting pressure on businesses to adopt more sustainable practices.

Labour concerns

This issue of sustainability goes beyond weather and climate.

Supply chain managers must also increasingly heed the concerns of investors, regulators, employees and customers to measure and mitigate the social cost of doing business. For example, if abusive or unsafe labour practices are discovered along the supply chain, there is mounting legal and consumer pressure to find alternatives or change those practices. The increasing cost of labour in some markets is also an ongoing concern for businesses across a range of industries.

Technology and cyber threats

Increasing cyber threats can significantly undermine supply chain resilience and cause disruptions. The Medibank and Optus breaches of 2022, and the recent MediSecure hack, in which the personal data of 12.9 million Australians was compromised, show how vulnerable even the largest organisations are to these threats. This not only leads to financial loss but also erodes trust among partners and customers.

But it’s not just direct attacks and threats that are a concern Outdated technology lacks the speed, integration capabilities, security features and advanced analytics required to manage supply chain complexities, resulting in delays, errors and inefficiencies. As legacy systems get left behind, we’ve seen organisations such as ANZ, Telstra and BOQ investing heavily in updates to their technology and systems.

Strategies to mitigate supply chain issues

Investing in supply chain resilience requires businesses to navigate geopolitical tension, adopt new technologies and diversify suppliers, which can be challenging and costly. But it is worth it. According to the Wall Street Journal, businesses that invest in supply chain resilience enjoyed a 23% growth in revenue from 2018 to 2023. This compares to the 15% growth their peers enjoyed.

So, how do you, as a business owner or supply chain manager, practically mitigate supply chain risks in 2025? Here are some thought-starters:

Develop a better understanding of your suppliers and the businesses that supply them. Conduct regular audits to identify potential vulnerabilities.
Adopt technology to increase visibility and simplify processes. Artificial intelligence and IoT monitoring can help make real-time data-driven decisions for efficiency. This information can be shared with stakeholders to improve coordination and reduce disruptions.
Build stronger partnerships with stakeholders, suppliers and logistics providers to ensure alignment on risk management.
Collaborate with internal finance and marketing teams to enhance logistics decision-making, helping to manage costs and customer expectations.
Source from multiple suppliers across different geographies to reduce dependency on a single region or supplier. Establish backup suppliers for critical materials and components.
Focus on renewable energy for operations and partner with eco-conscious energy and raw materials suppliers.
Create detailed risk assessments and emergency response plans for disruptions such as cyberattacks, natural disasters or geopolitical conflicts.
Protect supply chain data with multi-factor authentication, encryption and regular security audits.

Octet’s suite of financial solutions also enhances supply chain resilience by addressing key cash flow challenges and promoting operational stability. With our intelligent supply chain finance solutions, you can extend payment terms to suppliers while ensuring your creditors are paid promptly.

Trade Finance ensures smooth import transactions by funding inventory and service purchases upfront, reducing cash flow strain during critical trade activities. While Debtor Finance (also known as Invoice Finance) unlocks funds tied up in unpaid invoices, providing immediate cash flow to manage expenses and invest in growth.

Your global supply chain partner

The challenges in global supply chains are only likely to intensify in 2025 due to an increasingly unpredictable global landscape. However, businesses that proactively invest in robust supply chain strategies can safeguard their operations and position themselves for sustainable growth.

Octet’s innovative supply chain financial solutions provide the flexibility and support to navigate supply chain management issues and challenges, strengthen supplier relationships and optimise cash flow. Get in touch to discover how we can help power your business.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

AI in finance: what you need to know

Posted on January 13, 2025January 14, 2025 by Russell Walsh

Artificial Intelligence is rapidly transforming the finance sector, driving innovation in analytics, decision-making and operational efficiency. This evolution isn’t about replacing finance workers but rather enhancing productivity by harnessing AI to tackle repetitive, time-consuming tasks.

Justin Kabbani, an AI implementation coach and keynote speaker, explains: “It’s about getting rid of that 30% of the work people are doing that is mundane, and giving them space to get back to high-value tasks.”

From accounting to procurement and commercial finance broking, AI in finance has the potential to elevate your work and unlock new opportunities. In this article, we explore how AI can be used in finance and its implications for the industry.

AI in finance: core applications

Justin identifies several areas where AI can significantly enhance the finance industry. “Tools like Copilot or ChatGPT help finance teams handle tedious tasks, from generating insights to simplifying client evaluations.” Examples include:

comparing inconsistently formatted datasets from different software systems

quickly performing complete financial analyses, including generating graphs and tables and providing data-driven insights for financial planning

evaluating new clients using discovery questions and providing rationale for decisions

supporting first-stage evaluations of financial or business scenarios

analysing large datasets to detect patterns consistent with fraudulent activity

chatbots and virtual assistants that provide 24-hour customer service, reducing the operational costs of a business

monitoring and ensuring compliance with financial regulations through automated audits

forecasting market trends, cash flow and business outcomes

automating invoice generation, approvals and payments

automating tasks like note-taking during meetings or phone calls, then generating follow-up notes and action items

Justin says harnessing AI doesn’t have to be expensive or difficult. “A lot of the work I do is with off-the-shelf software, Copilot and ChatGPT. These can seem like simple tools, but my clients are applying them to problems and consistently saving hundreds of thousands as a result.

“For example, an accountant-client of mine uses AI to organise and categorise transaction data really efficiently, turning complex tasks into streamlined processes.

“Smaller firms can leverage simple tools like chat functions that translate and document client conversations in multiple languages, enhancing service for non-English-speaking clients.”

Justin reiterates that AI in banking and finance isn’t about replacing staff but rather elevating their roles so they can move from administrative or repetitive tasks to focus on creative and strategic work. “The real promise of AI is in helping us be more human by eliminating menial tasks and unlocking our cognitive potential.”

The challenges of AI in the finance industry

Justin also sees many challenges with AI, but not necessarily from the technology itself. “The biggest roadblock is data privacy concerns,” he says.

“However, Microsoft stands behind the security of information that is processed in the Copilot environment. And the ChatGPT Team and Enterprise versions don’t learn from user data by default and have attained SOC-2 compliance to give businesses further confidence to use confidential data. Companies often apply excessive security standards to AI tools in a way they wouldn’t with other pieces of software they’re using.”

Lack of training is also an issue that limits the potential of AI tools. “People also need to move beyond a 10-word prompt and invest in creating structured inputs that deliver meaningful results.”

The perception that AI adoption is expensive is another issue that is holding businesses back, says Justin. “We’re talking about taking those really menial tasks or administrative tasks and using a program that’s pretty affordable and really quite reliable.”

Harnessing and understanding AI

If you work for a financial firm or are a finance broker and are eager to learn more about AI technology in finance, Justin’s advice is to start from the top down.

“I think the most important way to embrace it and get the most out of it is to start with the CEO and executive team. They need to understand the tools, see their capabilities and experience it themselves. Even half a day of training is enough to get to a level of confidence and competence to use these tools. I think it’s realistic for a team or individual, with three days’ worth of training, to build up that level of competence to be using it on appropriate projects.”

In the years to come, Justin believes the future of AI in finance will involve integrating multiple datasets – such as Google Analytics and CRM data – to uncover unique insights.

Here are some other ways we might be using AI in finance in the future:

AI will enable highly personalised financial services by analysing individual customer data. This will allow for tailored financial advice and products, improving client engagement and satisfaction.

Fraud detection will become even better as AI not only identifies patterns that indicate suspicious activity but also takes action to block that activity in real time.

Predictive analytics will become more sophisticated as AI analyses multiple indicators and datasets to anticipate risks such as economic downturns and geopolitical events. It can then offer strategies to mitigate potential threats.

Octet: your future-ready finance partner

AI is revolutionising the finance industry, offering powerful tools to streamline operations, enhance decision-making and uncover new opportunities. For businesses navigating this transformative era, having a smart finance partner like Octet can make all the difference.

With a deep understanding of business finance and innovative working capital solutions tailored to your needs, Octet is here to support CFOs, business owners, brokers and accountants. Discover Octet’s smarter supply chain finance solutions today to power your business growth.

Justin Kabbani is an in-demand keynote speaker and AI implementation business coach with more than 20 years of experience helping businesses and individuals harness the power of AI.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

How Octet’s collaboration with Corpay Cross-Border unlocked growth for a leading Australian importer

Posted on January 6, 2025January 22, 2025 by Russell Walsh

In the highly competitive Australian food and beverage distribution industry, businesses need to stay nimble, especially in a market where customer tastes and preferences constantly evolve. A Melbourne-based importer specialising in Asian cuisine, frozen goods, and alcoholic beverages, was on a mission to become Australia’s go-to supplier of Asian brands.

Established over 15 years ago, the business has grown steadily, earning a reputation for quality and reliability. However, to maintain its upward momentum, it needed financial flexibility to secure new products, meet rising demand, and attract international brands looking for distribution in Australia.

This is where working capital finance from Octet, introduced via our partnership with Corpay Cross-Border, was a game-changer, helping the company unlock growth potential in ways traditional financing couldn’t.

The challenge of scaling operations with a traditional finance facility

After a sustained period of steady 5% year-on-year growth, the business needed to scale up to meet increasing demand. Operating three distribution centres and managing a large fleet, it had established contracts with several Australian food retailers and exclusive distribution rights to numerous Asian brands. The goal was to continue to expand product lines and diversify offerings to become the preferred partner for new brands entering the Australian market.

Despite an impressive track record and commitment to excellence, cash flow management remained a challenge.

“The company had been working with a $400,000 trade finance facility from another financier,” explains Tony Ahdore, Octet’s Director Working Capital Solutions – VIC, TAS, SA. “While useful, this facility had limitations: it was expensive, offered a relatively low credit limit, and lacked integrated foreign exchange (FX) support.”

The business recognised that it needed a larger, more flexible finance solution to meet its growth targets.

How the Octet-Corpay partnership brought fresh perspectives

In April 2024, Octet and Corpay Cross-Border announced a collaboration focused on delivering innovative, tech-enabled financial solutions for businesses navigating the global trade landscape. Corpay, renowned for its expertise in cross-border payments and FX risk management solutions, identified that Octet’s working capital solutions could complement its services to Australian clients.

As part of the partnership, Corpay Cross-Border’s Head of APAC Enterprise Sales, Michelle Mak, introduced the importer to Octet Finance, believing that Octet’s tailored working capital finance could be the perfect solution to the company’s cash flow challenges. The introduction provided the business with access to Octet’s expertise in trade finance and a streamlined supply chain finance platform, while Corpay’s robust FX hedging tools were integrated into the solution to help the business manage currency risk with each international purchase.

Empowering growth with a flexible working capital facility

Octet provided a $1 million Trade Finance facility – a substantial increase over their previous financier’s line of credit.

“With this enhanced line of credit, the business could purchase a higher volume of finished goods from overseas suppliers, secure better pricing, and ultimately keep pace with customer demand,” Tony said.

The benefits of the Octet-Corpay solution went beyond increased funding. The Octet platform allowed the company to efficiently track transactions and control cash flow in real time, all through the intelligent supply chain platform. Combined with Corpay’s FX management tools, Octet’s facility gave the business a single, streamlined solution for handling both financing and FX exposure.

No longer needing to juggle separate systems or worry as much about fluctuating currency exchange rates, the business could focus on sourcing new products, expanding its offerings, and solidifying its position as a top importer in Australia’s food and beverage industry.

A catalyst for growth in a competitive market

For Australian businesses looking to scale internationally, this client success story illustrates how working capital finance can be a crucial driver of success. Octet and Corpay are supporting the company on its transformation from a steady performer to a growth-focused leader. The partnership enabled the business to leverage trade finance effectively, allowing it to navigate cash flow challenges, manage FX risks, and capitalise on expansion opportunities – all while mitigating many of the constraints of traditional financing.

Tony notes, “In an economic climate that often limits growth options for small-to-medium enterprises, working capital finance solutions like Octet’s can be a game-changer for companies with vision and ambition.”

As demand continues to grow for the business, Octet and Corpay are ready to adjust and increase the facility limit as needed. The importer’s leadership team is optimistic about the future, confident that with the right financing, their business will continue to flourish and set new standards in quality and service.

A partnership for sustainable growth

The collaboration between Octet and Corpay reinforces our commitment to supporting Australia’s innovative business community by providing the tools and expertise that can help companies unlock their potential and achieve sustainable growth.

If your business is facing cash flow challenges while striving to scale, similar to this Australian importer in the food and beverage industry, you may wish to consider a flexible working capital finance solution. By partnering with Octet and Corpay, you can unlock the growth potential of your business with enhanced financing, integrated foreign exchange tools, and a streamlined platform for managing both working capital and currency risk.

Speak to our team of working capital specialists to see how we can power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Setting financial goals for your business

Posted on January 6, 2025January 6, 2025 by Russell Walsh

The start of a new year can be an opportune time to review the financial goals of your business. Financial goals help guide decision-making, measure progress and ensure business sustainability. Are you a business owner keen to take more control over your business’ trajectory? Or perhaps you’re a commercial finance broker eager to explore ways to better guide your clients. Now is a great time to reassess and implement new business goals.

In this article, we explore how to establish financial goals for businesses, the steps to achieving them, and where businesses can go for help.

Assessing your business’ finances

Financial goals are essential for all businesses, and while a new financial year is a great time to reassess your goals, Octet Chief Financial Officer Campbell McCallum says regular assessment throughout the year is key.

“Regular or periodic financial reviews allow business owners or executives to assess performance, understand financial health, and identify and react to potential issues and opportunities early.”

Campbell says assessing your finances doesn’t have to be onerous, especially if actioned regularly. “You’ve got to pick the form it takes and how often you do it, but that will be driven by the nature of your business and what you’re trying to achieve.”

Types of financial goals for a business

So, what are some examples of financial goals for businesses?

Examples of short-term financial goals:

Managing cash flow: Positive cash flow is critical for all businesses. Monitor income and expenses to maintain control of cash flow. Make adjustments or access business finance when needed.
Reducing expenses: Regular financial assessment will reveal areas where costs can be cut without compromising quality, such as renegotiating supplier contract terms or finding more cost-effective service providers.
Increasing revenue: Implement strategies to boost income, such as launching a targeted marketing campaign or introducing new products and acquisition channels.

Examples of long-term financial goals:

Expanding the business: Plan for growth by setting goals to open new locations, increase production capacity or scale operations digitally.
Entering new markets: Research new local and global markets, or diversify your customer base and revenue streams vertically or horizontally.
Investing in new equipment: Allocate funds for upgrading technology or purchasing new equipment to improve efficiency and productivity.
Improving profitability: Focus on strategies that will enhance business profitability over the long term, such as adjusting pricing, reducing costs and increasing operational efficiencies.

Steps to setting financial goals

Campbell says business owners should consider four simple questions when setting financial goals: “Where is the business currently? Where do we want to go? How will we get there? How do we track our progress?”

Step 1: Assessing your current financial situation

“The first step is conducting a financial health check.” At this stage, you should dive into the business’ financial statements to uncover cash flow trends, develop an understanding of profits and identify expense patterns.

Step 2: Defining specific and measurable goals

Campbell says using a simple framework like SMART helps set better goals. SMART stands for:

Specific: Goals should be well-defined and precise.
Measurable: They should include criteria to track progress and measure success.
Achievable: They should be realistic, considering available resources and constraints.
Relevant: Goals should align with broader business objectives.
Time-bound: They should have a clear deadline or timeframe.

Step 3: Developing a plan to achieve your goals

Next, it’s time to create actionable steps by allocating resources, setting budgets and assigning key tasks throughout the business.

“Once you’ve set your goals, it’s important to consider how you’ll get there,” says Campbell. “You’ll need to set the benchmarks and milestones that you’re going to measure against and have a comprehensive plan in place to help you achieve that.”

Step 4: Monitoring progress and making adjustments

Regularly adjust business goals based on performance and market changes.

“You ultimately return to where you started, with a financial review,” says Campbell. This might be a quick check-in once a month or something more rigorous on a quarterly basis. Again, the form and frequency really depends on your business and objectives.”

For steps on conducting a comprehensive health check of your operations, explore our business health check guide.

How experts can help

Campbell says professional advisors such as commercial finance brokers and accountants can offer expertise in a range of areas to support goal setting. “Your broker or accountant can guide you through the initial stages of financial planning. They can assist with structuring your financial strategy and providing valuable insights.

“There are also other subject matter experts who can assess the feasibility of your financial goals. Industry experts have a detailed understanding of market conditions and can provide insights based on certain themes and projections.”

And then there is Octet. “As a funding provider, we can help businesses throughout the process by providing tailored working capital solutions, including Debtor Finance (also known as invoice finance) and Trade Finance. Working capital finance allows businesses to maintain liquidity, manage cash flow and achieve their goals in a timely fashion.

“A great example is when a business experiences peaks and troughs in cash flow. Working capital finance can help smooth out cash flow fluctuations due to seasonal sales and other factors. Intelligently applied, finance can also help to free up existing business funds to drive growth or take advantage of opportunities.”

Achieve your financial goals with Octet

If the start of a new year has inspired you to set new goals for your business, or you’re a broker looking to better support your business clients, our working capital specialists can help.

Octet offers innovative financial solutions to fit businesses in various industries, including labour hire, manufacturing and healthcare.

Get in touch today to discover more.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

What is business finance? The key to sustainable growth

Posted on January 2, 2025January 6, 2025 by Duncan Khoury

For businesses planning for growth and longevity, an understanding of business finance is not just beneficial. It’s essential. This knowledge helps safeguard financial health and equip businesses to make strategic decisions, ensuring they thrive in competitive markets.

In this article, we’ll answer the following questions: What is business finance, what are common financing options, and when is it time to seek finance?

Tim Bowring, Octet’s Head of Sales, Health, also helps us explore the business financing options for the health and pharmaceutical industry. But regardless of the industry you operate in, these insights will help you to better understand the business finance options that can help your business grow.

Understanding the best finance options for your business

Business finance encompasses all types of financial activities crucial for day-to-day operations and long-term planning. It includes managing cash flow, budgeting and funding strategic initiatives.

Tim says businesses must first grasp how cash flow works when it comes to understanding finance. “Cash is king. It pays the bills and repays debt. Having a good picture of how your cash flow works will set you up to understand the most appropriate finance options available to your business.”

Tim says when looking at types of finance, there are several key factors to consider, such as:

How often will you want to draw down on the facility?
How quickly can you repay it?
Are there ongoing fees to be paid if you haven’t used the facility or drawn all of the limit?
What security do you need to get the finance?

“One common misconception is that the lowest interest rate is the most important thing,” he adds. “But the interest rate isn’t always paramount.”

When it comes to the healthcare sector, Tim helps secure funding for businesses who work with him on a range of needs, including:

paying ongoing wages for locum doctors and dentists
importing stock and equipment
manufacturing medical supplies and pharmaceuticals
covering IT service contracts.

Business financing options

There are many financing options for managing and growing a business. Many businesses rely solely on internal sources of funding (so the funds they generate as part of operations).

When seeking external sources, most business owners will be familiar with traditional forms such as bank loans and lines of credit. However, most businesses are experiencing tightening conditions, and banks can take months to approve finance applications. Banks also often seek personal security and collateral, which is a drawback for businesses that don’t have significant assets or don’t want to risk their director’s personal assets.

Equity financing is also an option for start-ups and growth-stage companies without steady cash flow. However, this dilution of ownership and long-term commitment are significant drawbacks of this type of finance.

Trade finance and debtor finance (also called invoice finance) are two other types of business financing options. Trade finance products help facilitate international and domestic transactions, mitigating risks and facilitating smooth transactions between buyers and sellers.

“If you have to pay for stock on delivery, for example, trade finance can provide you with extended terms,” says Tim. “If you have short payment terms, there are even ways to negotiate an early settlement discount with the supplier.”

Debtor finance (also called invoice finance) helps bridge cash flow gaps by allowing businesses to borrow against their receivables ledgers.

“A business that’s growing rapidly by offering competitive credit terms to its customers is likely creating a cash shortage in the business,” Tim says. “If it is buying stock that is paid at order or shipping, it is also negatively impacting the business’s cash flow. Invoice finance can unlock up to 85% of invoice values immediately, which is essential for maintaining operations and funding growth.

“In today’s challenging environment, businesses are feeling the cash flow pinch. The key to managing cash flow gaps is often intelligently tailoring the right business finance solution for your supply chain and growth requirements.”

Healthcare companies particularly rely on a smooth-flowing supply chain to support patient wellbeing and ensure the timely availability of medical and other supplies. For many businesses operating in the industry, business finance to manage cash flow is crucial to safeguard their supply chain and network.

Ready for better business finance? What you need to know

Before applying for any variety of business finance, Tim recommends preparing by having a detailed cash flow forecast and identifying any cash flow gaps. “Then, make sure you ask plenty of questions of the financier about their processes and the specific product/s to see whether they’re a suitable fit.”

Questions include:

What security is required to obtain the facilities?
What are the line or service fees?
Does the facility or platform protect my business from risk when importing from overseas?
What is the speed of transactions?
How can you support my businesses to achieve growth, whilst making informed financial decisions?

“Octet has a proven track record of supporting Australian businesses. Whatever industry you’re in, we can help you accelerate supplier payments, general cash flow and foster stronger relationships with customers and suppliers with our Debtor Finance and Trade Finance solutions.

“The Working Capital Specialists at Octet will work with you to help you better understand your cash flow, where the gaps are and what options are available for funding those gaps.”

For those in the healthcare and pharmaceutical industry, these solutions can mitigate the unique challenges faced by the industry and make the most of growth opportunities.

Discover the best business finance fit for you

For many businesses, accessing appropriate business finance is crucial to achieving sustainable growth. Octet is committed to supporting businesses through tailored financial solutions, helping them understand their cash flow and funding options and ensuring they are well-positioned to seize growth opportunities.

Whether you’re in the healthcare industry and need timely supply finance chain solutions, you’re a labour-hire company with cash tied up in unpaid invoices or a manufacturer seeking new trade opportunities, we can help. Want to know more? Get in touch with the team today.

Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Business health check: is your business ready for 2025 and beyond?

Posted on December 29, 2024February 23, 2025 by Russell Walsh

In today’s uncertain and unpredictable business environment, ensuring your company’s resilience and adaptability is paramount. Conducting a comprehensive business health check allows you to evaluate your financial position, operational processes, talent, supply chain, and assets. This proactive approach helps identify strengths and weaknesses, enabling you to recalibrate strategies for sustainable growth.

This article outlines the benefits of performing a business health check and provides strategies to implement it effectively. These insights serve as a foundation for informed decision-making and long-term business sustainability across various industries. As we progress through 2025, let’s prepare your business to navigate upcoming challenges and seize emerging opportunities.

Business readiness checklist: 9 key considerations

1. Finances and cash flow

Begin your health check by assessing your financials. Reflect on questions such as:

How do our finances align with our overarching business objectives?
Are our financial procedures, like bookkeeping, efficient and up-to-date?
When was our last thorough assessment of the profit and loss statement?
Should we re-evaluate our cost structures?
What factors might impact sales in the near to mid-term?
What is our current net cash flow position?

Maintaining a three-way forecast—including profit and loss, balance sheet, and cash flow statement—is essential. Regularly tracking performance against these forecasts, ideally monthly, ensures that revenue aligns with targets and profit margins meet expectations. If margins are shrinking, investigate the underlying causes. Monitor expenses diligently, avoiding excessive discounting to boost sales, and manage fixed costs effectively. Explore potential savings across different areas.

A cash flow forecast can highlight potential shortfalls throughout the year. It’s crucial to have cash reserves or access to working capital facilities to cover these gaps. Ideally, businesses should maintain six months’ worth of fixed operating expenses in reserve. While this may not always be feasible, flexible working capital solutions from non-bank lenders can provide necessary support.

Additionally, staying current with tax obligations is vital. The Australian Taxation Office (ATO) has intensified efforts to address tax arrears, including reporting delinquent businesses to credit agencies, which can adversely affect credit scores. Relying on delayed tax payments or extended payment arrangements is unsustainable and can jeopardize financial stability.

2. Business operations

Evaluate your current operational structure. As laws and regulations evolve and your business grows, existing processes may require adjustments to support future objectives. Consider the following areas for improvement:

Performance Measurement: Implement actionable metrics to assess business milestones, achievements, and employee performance. This facilitates goal setting and future planning.
Technology and Equipment: Invest in software that streamlines processes or equipment that enhances efficiency and reduces costs.
Customer Feedback: Actively seek customer input and implement feasible changes to improve service quality.
Compliance: Stay informed about legislative changes affecting your operations to ensure ongoing compliance.
Supply Chain Resilience: Develop strategies to strengthen supply chains against potential disruptions.

While daily operations can be consuming, staying informed about industry trends and competitor positioning can offer valuable insights to refine your business practices.

3. Managing change and crises

Recent years have underscored the necessity for robust crisis and risk management plans. Crises can diminish income, disrupt sales, escalate costs, and damage reputations. A well-crafted crisis management plan enables swift and confident responses to various emergencies, including natural disasters, technological failures, or health crises. Key steps include:

Risk Assessment: Identify potential risks based on industry and location, and anticipate possible crises.
Response Planning: Develop detailed response strategies involving suppliers, staff, and resources. For instance, a product recall would engage product teams to identify defects and customer service teams to communicate with clients.
Leadership Engagement: Involve management in planning and provide necessary training. Discuss succession plans to ensure business continuity if key personnel become unavailable.
Employee Awareness: Ensure all employees understand their roles within the crisis management framework.
Communication Protocols: Designate representatives to liaise with stakeholders and the media during crises.

Consider developing multiple crisis management plans tailored to specific scenarios, such as IT security breaches or natural disasters. Numerous free tools and templates are available online to assist in crafting these plans.

4. People and culture

Assess your workplace culture and employee engagement levels. According to recent HR trends, businesses should recognize that employee satisfaction encompasses more than just compensation; it includes intellectual stimulation, opportunities for personal growth, well-being, and work-life balance. Key considerations include:

Demographics and Diversity: Understand the impact of an aging population and prioritize diversity and inclusion within the workforce.
Continuous Learning: Support employees in lifelong learning by offering opportunities to upskill or reskill.
Technological Awareness: Ensure all employees are informed about technological advancements, such as artificial intelligence (AI), and their implications.
Hybrid Work Models: Acknowledge that decentralized and remote workforces are now integral to modern workplaces.

Integrating AI and automation into HR processes can enhance efficiency. Digital assistants can address employee inquiries in real-time, allowing HR teams to focus on strategic responsibilities. AI can also streamline onboarding by automating paperwork and guiding new hires through induction processes. However, it’s crucial to balance technological integration with human interaction to maintain a supportive and engaging workplace environment.

5. Partnerships with suppliers and stakeholders

Reassessing relationships with suppliers and other external stakeholders, is a vital component of a business health check. To enhance these partnerships:

Alignment with Goals: Ensure supplier relationships align with current business objectives. If misalignments exist, consider renegotiating terms or exploring new partnerships.
Communication: Maintain open lines of communication. Discuss suppliers’ strategies for managing disruptions and risks, including their contingency plans.
Internal Processes: Review and optimize internal supply management procedures to ensure efficiency and clarity of roles.
Performance Monitoring: Implement systems to regularly assess supplier performance and provide constructive feedback.

6. Intellectual property

Intellectual property (IP) is a critical asset. During your health check:

Asset Inventory: Identify key products, services, business names, brands, and logos, and confirm legal ownership.
Protection Measures: While copyrights are automatic, consider formally registering trademarks, designs, and patents to secure legal protection. Trademarks, in particular, safeguard your brand and can appreciate in value as your business grows.
International Considerations: If operating internationally, ensure IP rights are secured in each jurisdiction to prevent potential legal conflicts.
Infringement Awareness: Regularly verify that your business does not inadvertently infringe upon others’ IP rights, as this can lead to costly legal disputes.

7. Cybersecurity

Cyber threats are an escalating concern. Recent reports indicate that in the 2023–24 financial year, over 87,400 cybercrime incidents were reported in Australia, averaging one every six minutes. Business email compromise and fraud were among the most reported cybercrimes, with small businesses experiencing an average loss of $49,600 per incident — an 8% increase from the previous year.

To bolster cybersecurity:

Software Updates: Regularly update software to protect against known vulnerabilities.
Multi-Factor Authentication: Implement multi-factor authentication to add an extra layer of security.
Strong Passwords: Enforce the use of robust, unique passwords.
Data Backups: Regularly back up data to secure locations.

By adopting these strategies, businesses can enhance their resilience against the evolving landscape of cyber threats.

8. New technologies

Embracing emerging technologies like artificial intelligence (AI) and automation unlocks new growth opportunities. Key applications include:

Data Analytics & Optimisation: AI enhances inventory management, logistics, and fraud detection.
Customer Insights & Marketing: AI analyses purchasing patterns for personalized recommendations and targeted campaigns.
Recruitment & HR Efficiency: AI streamlines hiring by screening applications and identifying top candidates.
Content Creation & Branding: Tools like ChatGPT assist in generating social media posts, blogs, and ad copy.
Operational Improvements: Automation reduces inefficiencies, cutting costs and improving workflow.

To maximize benefits businesses should invest in AI integration and employee training to foster innovation, scalability, and competitive advantage in a digital landscape.

9. Growth goals

Sustainable business growth requires careful planning and execution. Key strategies include:

Enhancing Core Offerings: Strengthen high-performing products and explore innovation opportunities.
Competitive Analysis: Identify market gaps and differentiation strategies by studying industry trends.
Securing Funding: Ensure access to capital for expansion while maintaining service quality.
Empowering Employees: Upskill teams and leverage untapped talent to drive growth.
Strategic Partnerships: Collaborate with suppliers and distributors to expand market reach.
Market Expansion: Explore new regions, eCommerce, and digital opportunities.

Regularly review marketing strategies to align with growth objectives and strengthen your brand identity.

In summary, a proactive approach to financial management, operational efficiency, technological adoption, and strategic planning positions businesses to navigate the complexities of 2025 successfully. Engaging with experienced finance partners, like Octet, can provide the flexible support needed to seize opportunities and achieve sustainable growth.

Health retailer Go Vita was expanding its supplier list, product lines and stores. It needed the finance to make that happen and Octet put in place a long-term working capital solution that allowed Go Vita to grow while maintaining cash flow.

When Vinomofo needed finance to fund its expansion plans, Octet delivered a flexible trade finance facility that gave the online wine retailer the fast finance solution it needed.

A healthy business starts with the right finance

When Vinomofo needed finance to fund its expansion plans, Octet delivered a flexible trade finance facility that gave the online wine retailer the fast finance solution it needed.

Begin your business health check with Octet

Ready to do a business health check? Reassessing your financial position is a great place to start.

Octet is the finance partner of choice for ambitious businesses of all sizes across a range of industries. Our customised working capital solutions, including trade finance, debtor finance and supply chain finance, have unlocked countless opportunities for our clients.

So, what’s next for your business? Discover what’s possible when you partner with us.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Octet Debtor Finance empowers Skillforce Recruitment to scale with confidence

Posted on December 1, 2024January 22, 2025 by Russell Walsh

For businesses in high-demand labour hire that service sectors like construction, mining, and logistics, rapid growth can bring significant challenges. Scaling operations often requires not only an increase in workforce size but also the financial flexibility to meet payroll, supplier payments, and other operational demands.

This was the challenge that Perth-based Skillforce Recruitment, a leading provider of tailored staffing solutions, faced as it grew alongside its clients. The solution came in the form of a powerful partnership with Octet, which provided the financial support needed to help Skillforce, and their clients, scale confidently and seize new opportunities.

The importance of financial flexibility in recruitment

Founded in 2010, Skillforce Recruitment has always been committed to providing top-tier staffing solutions for businesses in sectors that face high demand for skilled labour. Over the years, Skillforce’s reputation for flexibility and scalability has helped the company grow alongside its clients, providing customised workforce solutions to industries that often require rapid scaling.

However, as Skillforce’s business expanded, the need for a reliable financial partner became clear. Managing the constant flow of recruitment needs, payroll, and supplier payments was complex, and traditional financing options often didn’t provide the flexibility they required to meet client demands.

“Recruitment is about responding to client needs quickly, which often means rapidly scaling workforces to meet project deadlines,” explains Daniel Ziccardi, Managing Director of Skillforce Recruitment. “However, scaling is only possible when there’s financial flexibility to support that growth. That’s where Octet’s working capital solutions came in to help us optimise our cash flow, so we could focus on what we do best — serving our clients.”

Local mining companies turn to Skillforce for qualified personnel

Finding the right financial partner to optimise cash flow

Recognising the growing need for financial support to maintain smooth operations, Skillforce partnered with Octet who are experienced with providing tailored working capital finance solutions to labour hire businesses.

“When we started working with Octet, we were impressed by their deep understanding of our business and their ability to tailor a financial solution that met our needs. Octet offered us the flexibility we needed to scale efficiently and support our clients,” says Daniel. “Their working capital solutions were a perfect fit for our growth goals.”

Octet tailored a $750,000 Debtor Finance facility, which immediately gave Skillforce access to funds tied up in outstanding invoices, allowing the company to cover payroll and supplier payments without waiting for invoices to be settled. This enabled Skillforce to take on more clients, onboard additional staff, and manage larger recruitment projects without the stress of cash flow delays. As they’ve continued to expand, this facility has increased to $4.5 million.

“The limit increase reflects the company’s dynamic growth and increasing demand for its services. This boost in working capital enabled Skillforce to manage a larger volume of client projects and recruitment activities, all while maintaining financial stability,” explains Nigel Thayer, Octet’s Director Working Capital Solutions – WA.

Streamlining cash flow to expand operations

The funding provided by Octet allowed Skillforce to better meet the needs of clients in high-demand and fluctuating industries without disruption.

“Whether it was onboarding workers for a large-scale construction project or quickly scaling a team for a mining operation, with Octet’s working capital solutions, Skillforce could align its cash flow to the specific demands of each project,” said Nigel.

With reliable financial support, Skillforce was able to take on more clients and expand operations. This allowed them to manage multiple projects simultaneously and respond to new business opportunities without the worry of cash flow constraints. As a result, Skillforce could maintain the speed, quality, and consistency that their clients expect, all while growing their business and enhancing their reputation as a trusted partner in recruitment.

“Our collaboration with Octet enhances our ability to provide clients with a comprehensive growth solution that includes both reliable staffing and the financial backing needed to grow sustainably,” Daniel explains.

Skillforce have a large database of skilled construction labour hire candidates

A transparent and supportive partnership for sustainable growth

The relationship between Skillforce and Octet has been characterised by transparency and flexibility. Octet’s supply chain platform provides clients with easy-to-use tools to track and manage their financial transactions, giving businesses greater visibility and control over their cash flow.

“Octet’s platform is incredibly user-friendly,” says Daniel. “It allows our clients to validate, track, and authorise transactions at each stage, which reduces the complexity and risk of managing finances. The transparency of the platform has been critical in building trust with our clients.”

“Octet’s understanding of Skillforce’s business model and industry has made the partnership even more effective,” adds Nigel. “By providing tailored financial solutions that fit the unique needs of each project, Octet has allowed Skillforce to offer more comprehensive services that address both recruitment and financial support.”

Looking ahead, Skillforce plans to continue expanding its service offerings to cater to even more industries. The financial backing provided by Octet will be crucial in supporting these expansions, allowing Skillforce to offer even more tailored solutions to clients.

Says Daniel, “With Octet’s ongoing support, we can continue to help businesses scale and meet the growing demands of their industries. We’re excited to be part of their journey as they take on new opportunities and expand their operations.”

Power your growing business

If your business is experiencing rapid growth or you want to capture new opportunities, Octet’s labour hire finance solutions give your business the power to scale. We work successfully with Australian businesses facing these same growth challenges every day, providing access to best-in-class working capital solution and supply chain finance technology. Contact us today to discover how we can help power your business growth.

Boost your business: introducing our new business Term Loan

Posted on December 1, 2024January 14, 2025 by Duncan Khoury

Finding flexible and affordable financing can be challenging for any business. Increasing interest rates and restrictive bank terms often make it impractical for SMEs to access the finance they need.

Are you a business owner who needs more flexible finance options? Or perhaps you’re a commercial finance broker seeking better financing solutions for your clients? At Octet, we understand that the banks’ offerings are often too inflexible and take too long to approve. So, we’ve developed our new business Term Loan, a tailored financial solution designed to help you meet your business goals.

Whether you need a working capital loan for operating expenses, equipment financing, asset finance, or to restructure existing loan facilities, our Term Loan allows you to capitalise on opportunities, consolidate debts and grow your business.

Flexible financing for every business

With financial pressures continuing to impact SMEs, we’ve received feedback from our valued clients and broker network about the need for more flexible and affordable finance solutions. So, we launched the Octet Term Loan.

“We’ve listened directly to our clients, our referral partners and the market. We understand the need for a supplementary term loan product that we can package with our existing working capital loans for SMEs,” says Allan Howe, Octet’s Director of Working Capital Solutions, Queensland.

Our Term Loan is available to both existing and new Octet clients with Trade Finance or Debtor Finance facilities. Those registering for these facilities are also able to apply for the Term Loan, which offers up to $2 million in additional working capital with flexible repayment periods ranging from six months to three years. It’s the ideal solution for businesses seeking a short-term business loan.

“We have designed it to be very flexible, and can tailor the term of the loan to suit your business needs,” says Allan.

Our Term Loan empowers you with additional working capital to help you meet your business goals, such as investing in assets and new equipment, covering operational costs during quiet periods or consolidating existing loans.

A tailored solution for your business needs

Invest in assets, plant and machinery

Our Term Loans can be used to invest in assets to grow your business, secure additional space for your business or invest in machinery or equipment.

If a missing piece in your business is holding it back or slowing your growth, a fast cash injection can help. “It’s all about providing the extra firepower so you can seize opportunities and grow your business,” says Allan.

Keep on top of operational costs

Cash flow shortages can impact business growth. When cash flow slows, our Term Loan can help you manage operational costs efficiently. Pay for everyday expenses such as payroll, inventory, rent and utilities.

Pay out or retire existing debt

Use the Term Loan to retire or pay new and existing debt, including debt owed to creditors and the ATO. By retiring or paying out existing debt, your business can improve its cash flow, enhance its creditworthiness, have more flexibility in its daily operations and increase financial stability.

Consolidate existing loans

Our business Term Loan can be used to consolidate loans, giving you the ability to simplify loan repayments, reduce interest with our competitive interest rates or decrease monthly payments by extending loan terms.

With a fast approval process and competitive rates, you can easily consolidate loans, saving time and money.

Ready to grow? Apply for a Term Loan today

Octet has the financial tools you need to succeed. Already an Octet client? You can apply for a Term Loan of up to $2 million with flexible repayment terms ranging from six months to three years. Not registered yet? Contact us today and discover how we can help.

Explore our Trade Finance and Debtor Finance solutions and see how we support businesses in sectors such as manufacturing, construction, and transport.

* Terms and Conditions apply. Consult your dedicated Octet Relationship Manager or BDM for full Terms and Conditions.

What is supply chain finance?

Posted on November 28, 2024December 18, 2024 by Russell Walsh

In today’s fast-paced business environment, mastering cash flow is no longer simply a goal; it’s a necessity for success. Enter supply chain finance – a strategic solution designed to enhance liquidity and strengthen supplier relationships.

Are you a business manager keen to improve operational efficiency and financial stability or a commercial broker looking for innovative funding options for your clients? In this article, we will explore the fundamentals of supply chain finance, its benefits and how it can transform a business’s financial landscape.

Supply chain finance: how does it work?

Supply chain finance, also known as supplier finance, is a financial solution that supports both buyers and suppliers by optimising cash flow within the supply chain.

The solution allows suppliers to receive early payment on their invoices from a third-party financial institution while enabling buyers to hold on to their cash longer via extended payment terms.

Leveraging technology to link buyers, suppliers and financial institutions, supply chain finance enables faster, more transparent transactions. By using supply chain finance, businesses can improve supply chain management and minimise financial risk.

The benefits of supply chain financing

When cash flow is smoother, business operations can thrive – that’s where supply chain finance comes into play. This financial strategy not only eases financial pressure but can also build stronger, more resilient relationships, empowering both buyers and suppliers to better manage financial risks. Matthew Board, Founder and Managing Director of broker.com.au, outlines some of the benefits.

Improve cash flow: Supply chain finance allows businesses to unlock liquidity sooner, giving them the flexibility to extend payment terms without affecting supplier payments or disrupting cash flow. “It benefits both suppliers and buyers,” adds Matthew. “Buyers can maintain longer payment terms, which aids their cash flow, while suppliers receive cash upfront.”
Stronger supplier relationships: “It can also strengthen buyer-supplier relationships,” he says. “With prompt payments, suppliers avoid the frustration of delayed funds, fostering a healthier business relationship.”
Risk mitigation: By balancing cash flow needs for both suppliers and buyers, supply chain finance offers a layer of financial stability, helping to reduce risk and keep operations running smoothly. For suppliers, one advantage is earlier access to funds rather than waiting up to the agreed payment terms. It also reduces the risk of late payments since the lender covers most, if not all, of the payment upfront.”

Do you need supply chain financing for your business?

So, when is supply chain finance a good option? Take, for example, these scenarios:

Businesses with long cash conversion cycles: Companies with extended payment terms often benefit from the way supply chain finance works by keeping operations steady despite delayed incoming payments.
Working with international suppliers: The strategy can be useful for businesses with international buyers, where longer payment cycles are common. It can also improve trade relationships and reduce risks associated with importing and exporting goods.

Matthew recalls one local manufacturing business he worked with that produced carbon fibre wheels for high-end car brands, including Ferrari and Porsche.

“As an original equipment manufacturer for major car companies, you can imagine that the payment terms are at least 120 days. In addition, the bulk of this particular business’s clients were based overseas. Because they were foreign-based buyers, trying to find a financial solution was quite difficult.”

This is where supply chain finance can bridge the cash flow gap effectively.

Supply chain finance is also beneficial for service-orientated businesses with big blue-chip buyers or clients that delay payment, Matthew adds.

He reflects on one case where a labour-hire company had several major banks as clients and faced payment delays. “In situations where staff must be paid fortnightly or weekly, but payment takes months to come through, supply chain finance provides the essential support needed.”

How Octet can help your business thrive

Navigating cash flow challenges and maintaining strong supplier relationships is crucial to business success. Octet’s intelligent supply chain finance solution is designed to support exactly that, giving you the ability to fund business growth and invest in supply chain innovation. Our offering allows businesses to extend payment terms while ensuring their suppliers are paid instantly.

Octet’s supply chain finance and other working capital solutions are tailored to address specific cash flow challenges and growth opportunities. We offer a full range of other products to ensure your business’ diverse needs are met, including:

Trade Finance: Provides a flexible line of credit to power international and domestic trade transactions keeping cash flow steady, allowing businesses to secure inventory and services without straining cash reserves.
Debtor Finance: Turns unpaid invoices into immediate cash, ensuring steady cash flow for companies with extended credit terms.
Term Loan: Provides flexible funding for expansions or major asset purchases with predictable repayments for financial stability.

Discover Octet’s solutions today

With Octet’s supply chain finance, Australian businesses can accelerate cash flow by extending payment terms with customers while ensuring suppliers are paid promptly, creating healthier and more resilient supply chains.

Get in touch with us today to discover how we can help foster your supplier relationships, strengthen your cash flow and help your business grow.

Matthew Board is the Founder and Managing Director of broker.com.au and leads a team of business finance experts connecting borrowers with the right funding solutions to optimise their operations.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Proven strategies for successfully growing your business

Posted on November 28, 2024December 2, 2024 by Russell Walsh

There are many ways to grow a business – organically, strategically, through innovation or expansion. While growing your business can be exciting, the path forward isn’t always clear. But with the right business growth strategy in place, you can sustainably increase revenue, expand your customer base and even enter into new markets.

Octet is here to support you on this journey, providing finance and payments solutions to turn your growth goals into sustainable success. Read on as we explore how to find your best direction!

Key ways to grow a business

To understand how a business can grow effectively, we spoke with creditte founder and director Morgan Wilson, who has extensive experience helping businesses grow through various financial methods and operational efficiencies.

He lists the following methods as solid strategies for business growth.

Organic growth: This includes increasing sales, improving customer retention and entering new markets.
Inorganic growth: Mergers, acquisitions or partnerships with complementary businesses can provide significant growth opportunities.
Innovation: Introducing new products, services or processes that differentiate the business in the market.
Market expansion: Tapping into new geographic locations or targeting new customer segments can broaden a business’ reach.
Diversification: Expanding into related or new industries to create additional revenue streams.

As Morgan highlights, successful business expansion requires more than just ambition; it demands a well-thought-out action plan that addresses specific goals. When developing an action plan for business growth, each method needs careful planning and a strategic approach.

Which business growth strategy is right for you?

We know that having a thorough strategy is crucial. So, which strategy is right for your business and its direction? It could well be the million-dollar question.

“A structured business growth strategy aligns your resources, goals and actions, ensuring that all parts of your organisation are working towards the same objectives,” says Morgan. Let’s explore this further.

Positive strategies

Consider these effective business development growth strategies.

Focusing on customer retention: Delivering exceptional customer experiences encourages repeat business.
Increasing average transaction size: Upselling and cross-selling to existing customers is often more effective than acquiring new customers.
Improving sales processes: Streamlining the sales funnel can enhance conversion rates and boost revenue.
Expanding product or service offerings: Innovation around core offerings can lead to new revenue streams.
Targeting new markets: Exploring untapped geographical or demographic markets can accelerate growth.

Morgan advises businesses in the growth phase to prioritise planning. “Be deliberate about what you do – don’t simply pursue growth for growth’s sake.”

Common pitfalls

It’s important to also familiarise yourself with potential issues to ensure you take the right direction with your planning. Common pitfalls include:

Resource misallocation: Investing in initiatives that do not yield returns or align with the business’ overall vision can drain valuable resources.
Operational inefficiencies: If growth isn’t properly managed, businesses may experience stretched operations, resulting in poor customer service or operational breakdowns.
Cash flow issues: Rapid expansion often requires upfront investment, leading to liquidity problems without careful planning. A robust strategy can help mitigate these risks by ensuring effective resource management and financial stability.
Burnout: Morgan notes, “We often see business owners without a strategy ultimately working for the business rather than the business working for them.”

Proper cash flow management is key to sustaining growth. It ensures that working capital can support operational needs as you scale. Furthermore, staying flexible in your approach allows for necessary adjustments in response to market changes.

Incorporating technology, marketing and strategic investments into your business growth plan can also enhance your potential. Automation and data analytics streamline operations and reduce costs, while digital marketing strategies can expand your audience reach at minimal expense. Additionally, strategic investments in equipment, technology and talent are crucial to support scalable growth without overextending your resources.

The right financing strategies for growth

Access to the right finance solutions is essential for implementing effective business growth strategies. With the right financial product, businesses can unlock their potential for advancement. At Octet, we offer a suite of innovative working capital solutions, including Debtor Finance, Trade Finance and Term Loans.

Debtor Finance enables businesses to use outstanding invoices as collateral to maintain steady cash flow. This is crucial for managing expenses and investing in growth opportunities, especially for those facing extended credit terms. With debtor finance, businesses can execute their financial plans more effectively, reducing uncertainty from delayed customer payments.

Trade Finance supports domestic and international transactions by providing funding to purchase inventory or services. This ensures that companies can meet demand without straining cash flow, allowing for immediate payments to suppliers while repaying their financier at a later agreed date. Additionally, securing competitive exchange rates upfront can protect against currency fluctuations and solidify your bottom line profitability.

For other business growth requirements, our Term Loan provides structured funding for capital investments, expansions or significant purchases. It offers a predictable repayment schedule, aiding strategic planning and enhancing financial stability. In conjunction with either Trade or Debtor Finance, businesses can use term loans to invest in assets, cover operational costs during slow periods or consolidate existing debts.

Getting your business growth plan right

By integrating these financial tools and products into your business growth plan, you can confidently navigate growth opportunities and build a sustainable future.

Ready to advance your growth goals? Contact us today for tailored supply chain finance solutions.

Morgan Wilson is the Founder and Director of business advisory service creditte. Throughout his career, Morgan has delivered accounting, taxation and business advice to small, medium and large enterprises around Australia.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Driving financial stability via smart Debtor Finance and Buyer Protection

Posted on November 28, 2024 by Russell Walsh

A successful recruitment agency in Western Australia was facing a series of challenges that were hindering its growth potential. Specialising in labour hire, the company provides contract staff across various blue-collar and white-collar sectors. With over 1,000 successful placements and a reputation for delivering professional, personalised services, the company had become a leader in its field with demand for their services increasing every month. However, despite this success, the business struggled with cash flow instability – a challenge that was hindering their ability to grow and take advantage of customer opportunities.

The challenge of unpredictable cash flow and missed opportunities

The company’s primary issue was that its sales growth had outpaced the restrictive invoice finance facility (also known as debtor finance) provided by their previous financier. The business had been relying on invoice financing to maintain cash flow, but the parameters of that particular facility were proving unreliable.

As the business could not predict how much funding it could draw each week, it became increasingly difficult to take on new customers, increase business with existing customers, manage payroll, and meet increasing tax and super obligations. The inability to access sufficient cash flow on demand created a constant feeling of uncertainty, limiting the company’s ability to scale. The levels of funding generated against invoices and specific customers were inconsistent, making it difficult for the company to plan their cash flow. This unpredictability was particularly damaging given a critical requirement of a labour hire business is to manage timely payments of the weekly payroll for its contractor base.

The company found themselves in a frustrating cycle. Certain key clients were eager to expand their relationship with the company. However, the business was forced to turn them down or limit the amount of work they could accept due to the lack of sufficient funding. This situation not only created missed sales opportunities, limiting their growth potential, but also impacted their profitability.

Seeking security via a tailored working capital finance with Octet

Recognising the urgent need for a more reliable finance partner, the labour hire the company reached out to Octet, seeking a way to improve cash flow and streamline its financial operations. After a thorough assessment of their financial situation, Octet’s Director of Working Capital Solutions – WA, Nigel Thayer, structured a tailored solution that would address their cash flow challenges and support their growth ambitions.

“We knew we could structure a facility that not only generated significantly more cash for the business but would allow them to take on more work, all while having confidence in their weekly funding levels,” Nigel explained.

Octet provided a comprehensive finance package including an increased $1,750,000 Debtor Finance facility that was designed to release the cash tied up in unpaid invoices. With this facility in place, the company was able to access a much larger portion of their receivables, ensuring they had the liquidity needed to operate smoothly. The Debtor Finance package provided the business with certainty on the levels of funding available to each of their debtors, which provided a significant funding enhancement over its existing financier.

To add a further layer of comfort to the business owner, Octet introduced a ‘Whole of Turnover’ Buyer Protection insurance package. This coverage underpinned the debtor finance line, protecting the business from the risk of debtor insolvency. In simple terms, this meant the company could be confident that if any clients were unable to pay their invoices through an insolvency event or protracted default, the insurance would cover those debts, mitigating the risk of bad debts.

“This dual approach was designed to not only generate significantly more cash for the business but also to provide a safety net against potential bad debts,” said Nigel. “It is the perfect combination for a fast-growing business and I’m really pleased we could deliver our solution and release the shackles that were holding this business back”.

The benefits of accelerated growth and increased protection

Since transitioning to Octet, the business has seen both immediate and longer-term benefits. With access to more than double the funding they had previously, the company now enjoys the financial flexibility to meet payroll, cover operational costs, and take on more work from existing clients. This has enabled them to expand services and secure larger contracts, leading to greater revenue opportunities.

“The inclusion of Buyer Protection has given the business peace of mind, as they no longer worry about clients going insolvent and leaving them with unpaid invoices,” says Nigel. “This added security has allowed them to focus on growth without constant cash flow concerns.”

Octet’s financial package not only provided more funding and better protection but also came at a lower cost than their previous financier, who offered no protection against bad debts. This improved cost efficiency has had a direct positive impact on the business’s bottom line.

With a solid financial foundation in place, the company is now positioned for sustainable growth and can confidently plan for the future.

Grow your business with Octet

The right working capital solution, paired with Buyer Protection, can transform a business’s ability to scale and thrive. When added to our Debtor Finance facility, Octet Buyer Protection safeguards your business from the misfortune of bad debts. For companies in industries such as labour hire, wholesale, manufacturing and other business-to-business based sectors, Octet offers tailored supply chain finance solutions designed to support growth, manage cash flow, and protect against financial risks.

Speak to our team of working capital specialists to see how we can power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

How to improve cash flow in your business

Posted on November 12, 2024February 16, 2025 by Russell Walsh

Maintaining a healthy cash flow in an unpredictable economic climate is crucial for business resilience. Doing so ensures your business can meet its financial obligations and seize growth opportunities, but improving cash flow in business can be a challenge in many industries.

In this article, we provide practical information on business finance to improve your cash flow, helping your company not only survive but thrive in these more difficult economic conditions.

How to control cash flow in business

Cash flow is the lifeblood of any business, representing the movement of money in and out of the company.

Sam Ralton, Octet’s Director of Working Capital Solutions, VIC, TAS, SA, explains, “The importance of cash flow is the ability to pay for goods and services when they fall due. Profit is a snapshot of how much money the company’s earned after expenses, but that doesn’t mean that the cash flow is in a healthy position.”

In fact, many companies confuse high profit with good cash flow. While the two are somewhat intertwined, improving cash flow in business is much more about forward thinking, planning and strategy.

“In a growing business, cash flow management gets increasingly harder because although you may have good margins and you’re making a profit, there’s a lag in time before that money is available to you, and therefore the cash flow runway is restricted,” Sam explains.

Cash flow runways and forecasts

A cash flow runway is the period a business can operate before it runs out of money. Having a clear understanding of your cash flow runway helps you plan and ensures the business can cover its expenses for a set period.

Cash flow forecasts are equally important as they predict future cash inflows and outflows, allowing businesses to prepare for potential shortfalls. “Cash flow forecasts are a good tool and indicator of when your business can pull certain growth levers or, conversely, restrict unnecessary spend,” says Sam. “They’re essential to ensure you don’t spend money today that you may need in the near future.”

So, what are some practical strategies for managing your business cash flow opportunities and issues?

6 simple strategies for improving cash flow in business

Review pricing structures: Ensure pricing covers your costs and desired profit margins. Regularly review and adjust prices to reflect market conditions.
Increase sales: Implement more layered brand marketing strategies and explore new markets and product verticals to boost revenue.
Control expenses: Regularly review expenses to identify and cut unnecessary costs.
Faster payment collection: Implement stricter payment terms and follow up on overdue invoices promptly using appropriate accounting software.
Inventory management: Utilise technology to maintain optimal inventory levels, reduce any holding costs and free up cash.
Supply chain management: Negotiate better terms with suppliers to improve cash flow timings. Where it makes sense for your business model, early payments can sometimes create opportunities to discuss discounts with appropriate suppliers.

Explore our recent article on managing cash flow strategies to find out more.

Business cash flow solutions for working capital finance

Working capital finance products like debtor finance (also known as invoice finance) and trade finance can significantly improve cash flow.

Debtor Finance cash flow benefits

Debtor finance provides an instant cash injection by unlocking funds tied up in unpaid invoices. This liquidity helps cover operational expenses, supplier payments and even fund growth opportunities.

Sam advises, “Debtor finance can give you the cash flow required upfront. So if you need funds earlier, you’ve got the certainty of borrowing against your invoices rather than waiting for those payments to arrive under the original terms.”

Businesses that access debtor finance can execute more effective financial plans by better managing cash flow fluctuations and the uncertainty associated with extended payment terms or delayed payments.

Unlike traditional loans, debtor finance requires no personal assets as security. This flexibility allows you to access funds when you need them, without risking valuable assets.

Trade Finance cash flow benefits

Trade finance offers substantial cash flow benefits by providing a tailored line of credit that bridges the gap between purchasing and selling goods. This funding solution ensures that businesses do not have to tie up their cash flow in inventory that takes weeks to arrive, process and sell.

By introducing a financial partner, such as Octet, into the supply chain, businesses can access funds to pay suppliers immediately, whether they are local or overseas. This enables the business to maintain healthy cash flow, as they can repay the credit facility over time rather than having their working capital tied up in these often lengthy transactions.

Because you can set a competitive exchange rate for the transaction upfront, trade finance can also safeguard against currency fluctuations. This supports smoother and more predictable financial management and helps increase your business’ purchasing power.

Where to go for business cash flow solutions

Implementing effective cash flow management strategies and leveraging working capital finance products can help you confidently navigate economic uncertainties. But staying on top of business cash flow and utilising these strategies and products can be a complex exercise, even for the most experienced of operators.

That’s why seeking professional advice is often a good idea. Financial planners, accountants, commercial finance brokers and business finance experts can all provide valuable insights and tailored solutions. For earlier growth stage businesses, it’s really important to consult widely in order to find the most suitable cash flow advice for your unique business circumstances.

Keep your cash flowing

Improving cash flow is essential for business stability and growth. At Octet, we’re here to support your business at every stage, offering expertise and financial solutions tailored to your needs. Our working capital products are designed to help businesses in all industries manage cash flow effectively.

Our team can provide guidance on leveraging innovative supply chain finance solutions and tools to maintain consistent cash flow, crucial for sustaining and growing your business in these challenging conditions.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

How to manage business growth for sustainable success

Posted on November 6, 2024December 2, 2024 by Russell Walsh

Managing business growth is a challenge many companies face. Whether your growth is planned or occurs rapidly due to external factors, handling it well is critical to ensuring long-term success. From maintaining cash flow to addressing skills shortages, businesses must implement strategies that support sustainable growth.

This article explores how to manage business growth effectively and address expansion challenges, particularly for businesses in rapid growth phases.

What is business growth?

Business growth refers to the expansion and development of a company, whether through increased sales, market share, assets or workforce. So whilst growth generally signifies a positive trajectory, its meaning can vary significantly among different organisations depending upon their objectives.

Working capital specialist Neil Tunstall is the Managing Director at Thane Commercial. He highlights that the motivations behind business growth can vary. “There are so many different factors that impact every business, and each one is different. What are the objectives of the owners? Are they looking to create a very successful large organisation, or are they more comfortable with slower and more gradual growth?”

Neil advises businesses to take a strategic approach to achieve sustainable business growth. “Make sure you are working with your advisors and accountants, and put intellectual effort into forecasting,” says Neil. “Don’t just say we’ll grow by 10%; it needs to be strategic.”

Managing sustainable business growth involves setting clear objectives, understanding market dynamics and collaborating with financial experts to create a well-informed growth plan that aligns with the business’s unique vision and goals.

So, why is growth important in business? Growth is essential because it can contribute to profitability, increased market share and more competitive advantage. It allows businesses to innovate, expand offerings and attract investment. Sustainable growth fosters resilience, helping companies adapt to market changes while enhancing their long-term stability and success.

What is a good percentage for business growth?

A good business growth percentage varies depending on factors like economic growth, industry, company size and maturity. For many companies, an annual growth rate of 10% to 15% is considered strong and a particularly good growth rate for small to mid-sized businesses.

How to sustain business growth

Managing business growth can indeed be a challenging endeavour. To ensure sustainable growth, adopting a clear and actionable framework is essential. The following steps are a roadmap for how to manage growth in business:

Set clear and achievable goals: Defining realistic objectives aligned with your business resources is crucial for maintaining focus. Neil says, “Businesses need to be looking two to three to four years out, creating a roadmap with forecasting that includes the right structures.” This foresight allows organisations to plan their growth trajectory strategically.
Train and develop your team: Equipping staff with the necessary skills to handle increased workloads and embrace new technologies is vital for sustainable growth. Neil says, “A big part of growth is looking at how businesses grow their staff or people, so they come along the journey with them.” Investing in your team ensures they are prepared to contribute effectively to the business’ expanding needs. It’s also important to extend the team to also include key advisors and business partners when necessary.
Leverage financial management tools: Effective budgeting and forecasting tools are essential for managing cash flow and growth capital. Neil says, “You’ve got to make sure that the business has the runway to meet its growing demands.” By using these tools, you can learn how to sustain growth in business and make informed financial decisions that support your growth objectives.
Invest in technology: Digital transformation is essential for business growth because technology enhances efficiency and productivity. Neil advises, “Businesses should visit industry expos and actively engage with industry bodies to see what their competitors are doing to keep up with technological advancements.” Embracing digital and technical transformation enables companies to adapt and innovate in a rapidly changing market. It’s also important to understand how digital marketing helps in business growth.
Manage your supply chain: Ensuring your supply chain can handle increased demand without bottlenecks is critical for sustaining growth. Neil stresses the importance of evaluating supplier relationships: “What are the terms we’re getting from suppliers? Do we have the right structures in place to grow and meet obligations as they fall due?” A robust supply chain management strategy is essential to effectively meeting customer demands. Knowing how customer experience drives business growth is vital.

By following these steps, businesses can create a solid foundation for sustainable growth.

Leveraging working capital finance

Achieving business growth requires adequate funding, and leveraging tailored working capital solutions can support expansion without straining cash flow. Octet offers several solutions that can help businesses navigate the complexities of growth while maintaining financial stability. Here are three to consider:

Trade Finance: This form of working capital finance helps businesses manage cash flow during expansion by accelerating their supply chain and payment terms. Neil emphasises the benefits of trade finance, saying, “With Octet’s Trade Finance, businesses have the capacity to fund their full trading cycle, ensuring sustainable growth.” By providing immediate capital for inventory purchases and operational expenses, trade finance can bridge the gap between cash outflows and inflows, enabling businesses to seize growth opportunities
Debtor Finance: By unlocking cash tied up in unpaid invoices, debtor finance (also known as invoice finance) offers businesses immediate liquidity to fund growth operations. Neil notes that Octet’s Debtor Finance product is designed to be low-touch for clients: “This allows them to plan growth over the next 12 to 18 months without constantly revisiting credit approvals.” By accessing funds tied up in outstanding invoices through debtor finance, businesses can alleviate cash flow constraints and invest in initiatives that drive expansion.
Term Loan: Octet’s Term Loan is designed to help businesses secure the funds they need to grow. Available with flexible terms ranging from three months to three years, this loan allows businesses to borrow up to $2 million. It’s tailored for both short-term needs, such as bridging cash flow gaps, and long-term investments, like expanding operations or purchasing equipment. With a fast approval process and competitive rates, businesses can manage their finances with greater control and predictability.

Integrating these financial products into a comprehensive business growth framework can help overcome common business growth barriers and navigate the advantages and disadvantages of business growth. This allows companies to thrive and expand in today’s competitive market.

Learn more about how to maintain business growth with Octet

Sustainable business growth is achievable through strategic planning, team development and the effective use of working capital finance. By partnering with Octet, businesses can access the financial support necessary to navigate the key challenges of business growth and capitalise on opportunities, ensuring a thriving and sustainable growth trajectory.

Neil Tunstall is the Founder and Managing Director at Thane Commercial with over 40 years expertise in the banking and finance industry. Specialising in working capital solutions, Neil has built a reputation for delivering strategic financial services, particularly in debtor and trade finance.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

Why managing ATO Tax Debt is crucial for your business’s future

Posted on October 30, 2024October 31, 2024 by Russell Walsh

ATO tax debt refers to the outstanding tax liabilities that businesses owe to the Australian Taxation Office (ATO). This can include unpaid GST, PAYG withholding, income tax, and other tax obligations. Accumulating ATO tax debt can occur due to various reasons such as cash flow issues, underestimating tax liabilities, and the complexities of tax compliance.

When businesses fail to meet their tax obligations on time, they will incur penalties and interest charges, further increasing their debt burden. Managing and clearing ATO tax debt is crucial for maintaining financial stability and avoiding severe consequences. As of December 2023, small businesses in Australia owed approximately $34.1 billion in tax debt, accounting for 65% of the total collectable debt.

Causes of ATO Tax Debt Accumulation

Small-to-medium sized businesses in Australia primarily accumulate debt with the ATO due to:

issues managing cash flow
underestimating tax liabilities
complexities of tax compliance
struggling with timely payments of GST, PAYG withholding, and income tax

Two other ways businesses can accumulate tax debt are if they treat withholding tax as revenue for the business or there is fraud committed by employees.

The COVID-19 pandemic exacerbated the tax debt issue, as businesses deferred tax payments to manage immediate financial pressures. Some businesses may also inadvertently over-claim deductions or omit income, further increasing their tax liabilities.

Olga Koskie, Director at Tax Assure, notes “Many businesses underestimate their tax liabilities, leading to significant accumulations of debt. It’s crucial for business owners to maintain a proactive approach to their tax obligations.”

Certain business types may be more susceptible to accumulating ATO tax debt, including, construction, retail, wholesale and manufacturing. These sectors typically have fluctuating income streams, making it challenging to maintain consistent tax payments. Moreover, businesses with complex supply chains or those heavily impacted by economic downturns are also at greater risk of falling behind on their tax obligations.

Increasing importance of clearing ATO debt promptly

Recent changes in the ATO’s approach have made it more critical than ever for businesses to address their tax debts promptly. During the COVID-19 pandemic, the ATO may have been more flexible with tax debt collection, often allowing some businesses to defer payments to stay cash flow positive.

“While these measures were necessary during difficult times, they have created long-term issues with tax debt that require our immediate attention,” Olga emphasises.

However, with the ATO resuming its normal debt collection activities, timely tax payments have become essential for maintaining financial health. Olga also highlights the urgency of addressing these issues: “Recent changes in the ATO’s debt recovery efforts underscore the importance of addressing tax debts promptly. Businesses cannot afford to ignore their tax obligations, especially with intensified recovery actions now in place.”

Some of the ATO’s recovery actions include:

Reporting businesses with outstanding debts to credit reporting agencies
Issuing garnishee notices, allowing the ATO to directly withdraw funds from a business’s bank account

Antony Resnick, Partner at dVT Group, states “The ATO has also increased the issuance of Directors Penalty Notices (DPNs), which hold company directors personally liable for unpaid tax debts.”

DPNs are a tool used by the ATO when a company fails to meet its tax obligations and are issued to the directors requiring them to pay the outstanding amounts. There are two types of DPNs:

Standard DPNs – Directors have 21 days to repay the outstanding sum or enter administration, liquidation or small business restructuring. “In addition, a non-lockdown DPN comes into effect when the BAS is lodged but remains unpaid after more than three months,” notes Antony.
Lockdown DPNs – Directors are automatically liable for the debt if it remains unpaid, or BAS returns are not lodged, after three months and cannot be remitted even after winding-up proceedings.

“It is better to submit your BAS on time, than to lodge it late, even if you cannot afford to pay the amounts due in terms of the BAS,” offers Antony. “If a DPN is then issued, it is a non-lockdown DPN and there are remedies available, including borrowing funds to pay the debt and get your business back on track.”

The issuance of a Lockdown DPN can have severe implications for a business. It can trigger insolvency proceedings, leading to the liquidation of the company. This not only affects the business’s operations but also impacts the directors’ personal finances and creditworthiness.

“A non-lockdown DPN, if not addressed in a timely manner, will become a personal liability of the director and could lead to insolvency of the director and puts in jeopardy personal assets such as the family home,” explains Antony.

The increase in DPNs has contributed to a rise in business liquidations in Australia, highlighting the importance of addressing tax debts promptly. In 2023-24, over 26,000 DPNs were issued by the ATO, an increase of 50% on the previous year.

Working capital solutions for managing tax debt challenges

To manage these cash flow challenges, businesses can benefit from working capital finance solutions. Octet offers a tailored Term Loan product, as part of the Debtor Finance and Trade Finance facilities, that can support businesses to pay off ATO debt. Whilst the ATO offers repayment plans for tax debt, the current (October-December 2024) General Interest Duty for late payments is 11.38% (compounded daily). Octet’s Term Loan is a flexible financial solution that provides the necessary funding to:

Clear tax obligations and avoid penalties
Enhance cash flow
Improve creditworthiness
Focus on growth and operational efficiency

Addressing ATO debts promptly not only helps maintain financial stability but also ensures that businesses can continue to thrive in a competitive market. “By securing tailored financial solutions, businesses can clear their ATO debts and focus on what they do best – growing their business,” says Olga.

Beyond paying off ATO debt, Octet’s Term Loan can be used for various other business needs:

Invest in assets, plant, and machinery: Grow your business by securing additional space or investing in equipment.
Manage operational costs: Cover everyday expenses such as payroll, inventory, rent, and utilities.
Retire existing debt: Improve cash flow and creditworthiness by paying off new and existing debts.
Consolidate loans: Simplify repayments, reduce interest, or decrease monthly payments with competitive rates.

Apply for an Octet Term Loan today

Explore our Trade Finance and Debtor Finance solutions and see how we support businesses in sectors such as construction, retail and wholesale.

Olga Koskie is a lawyer and business advisor with more than 20 years’ experience. Tax Assure is a specialist tax debt advisory firm, working with the ATO and state revenue offices to support the management of accumulated tax debt.

Antony Resnick is a Partner at specialist accounting and advisory firm, dVT Group. He is a Registered Liquidator with over 35 years of local and international experience in liquidation, bankruptcy and insolvency.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice. Sources and references include: Australian Taxation Office (ato.gov.au), Australian Small Business & Family Enterprise Ombudsman (asbfeo.gov.au), ABC News (abc.net.au), Accounting Times (accountingtimes.com.au)

The effect of economic growth on businesses

Posted on October 29, 2024November 20, 2024 by Russell Walsh

Economic growth can inspire great optimism not just within the business sector but also among the general population. It brings more demand for goods and services, more significant opportunities and often higher profits when managed correctly. But it also presents challenges for businesses, such as rising wages, inflation and competition for talent.

This article explores the effect of economic growth on businesses and how working capital solutions can help companies navigate both the opportunities and challenges of a growing economy.

What is economic growth?

Economic growth refers to an increase in a country’s production and consumption of goods and services over time. It’s typically measured by Gross Domestic Product (GDP), which tracks the total value of goods and services produced within a country. GDP can be measured in three ways: by total value added, total income or total expenditure.

How businesses contribute to economic growth is a complex subject. In short, they create jobs, drive innovation and boost consumer spending. When businesses thrive, they invest in new products, services and employees, stimulating economic activity.

In 2022-23, small businesses (those employing fewer than 20 people) added nearly $590 billion to Australia’s GDP.

Other factors contribute to economic growth in addition to business success. Private and government investment spurs economic development by funding infrastructure, technology and innovation. Technological advancements, such as artificial intelligence (AI), have already started increasing productivity in many sectors, and we can expect this trend to continue in Australia.

Jack Magann, portfolio manager at Oracle Investment Management, says, “The forecast of interest rates falling in Australia late this year or early next year could be conducive to increased investment, especially from the private sector, which has been restricted under the current higher rate level.”

How can economic growth affect a business?

A growing economy presents both opportunities and challenges for businesses. Let’s explore both.

Opportunities during economic growth

Increased demand for goods and services: As the economy grows, consumers have more disposable income, leading to higher demand for products and services. Businesses can capitalise on this by expanding operations and increasing sales.
Better financing options: During periods of economic growth, investors and lenders are more likely to provide capital to businesses, offering them the opportunity to expand. With favourable lending environments, companies can secure financing at better rates and terms, which supports further investment in their operations.
Innovation-driven demand: Economic growth often spurs businesses to innovate. As consumer expectations rise, there’s a growing demand for new and improved solutions. This creates an ideal environment for startups and tech businesses, allowing them to thrive by introducing fresh ideas and products. Established companies can also benefit by enhancing their offerings to stay competitive.

“A business can grow just through the tailwind of higher demand,” says Jack. “There is also the opportunity to increase sales through investment in the current operations or through expansion. When the economy is on the up, investors and lenders are more likely to provide capital to SMEs.”

Challenges during economic growth

Rising wages and competition for talent: With more companies expanding, the demand for skilled workers rises, leading to higher wages and retention challenges. While wage increases can help attract the best employees, they also add to the business’s long-term costs.
Inflation and cost management pressure: Inflation often accompanies economic growth, which means the cost of raw materials, services and wages increases. Businesses must manage these costs carefully to protect their profit margins. If inflation isn’t managed prudently, it can hurt businesses, particularly small ones.
Impact of fluctuating interest rates and global markets: Even in a growing economy, rising interest rates can threaten businesses, especially those reliant on debt financing for expansion. Fluctuating interest rates can increase borrowing costs and create uncertainty in financial planning.

Additionally, businesses are impacted by the global market, as international supply chain disruptions can affect local operations. For Australian SMEs, global events such as economic instability in key markets can lead to unexpected challenges in their growth trajectory.

Ways business can thrive regardless of the economic conditions

While economic growth presents opportunities, businesses must remain prepared for changes in the economic environment. Cash flow management is critical to thriving in any economy. Here, we’ll explore strategies businesses can use to maintain stability and grow sustainably, no matter the state of the economy.

Managing costs and planning

The economy moves in cycles, and it’s important to ensure your business is prepared to thrive in each stage. Staying on top of finances, managing costs and long-term planning are all essential.

“Cost management should always be a priority, no matter the stage of the economic cycle,” Jack says. “Businesses must consider the long-term return on investments and whether these costs will continue to deliver value in the future.

“Management should be constantly thinking about how they deploy capital into their business and what type of returns this capital is expected to make.”

Investing in technology

Technology can be a powerful tool to help businesses thrive in both strong and weak economic conditions.

“Investing in technology can increase efficiency while lowering costs,” Jack says. “Whether it’s streamlining operations or automating repetitive tasks, technology can lead to cost savings and efficiency across various areas of the business, from sales to marketing to administration.”

Maintaining cash flow with working capital solutions

During periods of growth, businesses often need to invest more in inventory, staff and equipment. If not managed properly, these expansions can strain cash flow. Octet’s working capital solutions are designed to smooth out these fluctuations by optimising accounts payable and receivable cycles. This ensures businesses have enough liquidity to invest in growth while avoiding cash flow crunches.

“Cash is king,” Jack says. “Paying close attention to your cash flow and working capital is important in all types of economies, even in a growing one. Managing how you pay suppliers and negotiate receivables terms can significantly improve your cash flow, allowing your business to expand sustainably.”

How economic growth affects businesses: in summary

Economic growth has a multifaceted effect on businesses, offering opportunities for expansion and challenges related to costs, competition and financing. By focusing on strategic cash flow management and smart working capital solutions, businesses can navigate various economic conditions and continue to thrive.

Explore how Octet’s suite of working capital finance – Debtor Finance (also known as Invoice Finance), Trade Finance and Term Loan – can help your business navigate economic growth cycles by getting in touch today.

Jack Magann is the Emerging Companies and Property Securities Portfolio Manager at Oracle Investment Management. With a Master of Commerce in Applied Finance and 3 years of experience, he focuses on small-cap investments, particularly in healthcare and health tech sectors.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

How debtor finance and a term loan fuelled growth for an infrastructure services specialist

Posted on October 18, 2024October 30, 2024 by Russell Walsh

A specialist in providing essential safety resources for rail infrastructure projects, our client has grown rapidly since its inception in 2019, expanding its workforce nationwide. Despite impressive revenue growth in its initial four years, the business faced significant cash flow challenges due to aged receivables and the impact of the pandemic. With mounting financial pressure threatening its expansion, the company turned to a commercial finance broker, who introduced them to Octet and its tailored working capital solutions.

Cash flow strains amidst rapid expansion

The company’s business model, operating on an hourly rate structure across multiple sites, required a sizable workforce to ensure the safety and smooth operation of large infrastructure projects. While their growth was impressive, it also created significant financial strain. A growing number of debtors and aged receivables were tying up the business’s cash, causing shortages and limiting their ability to reinvest in new projects.

The economic disruptions caused by the COVID-19 pandemic only worsened these challenges, with significant expenditures and disruptions leading to losses during 2020 and 2021. Despite their revenue growth, the business was running on tight margins, with an urgent need to access cash to fuel further expansion.

They had been working with a previous financier, but the relationship was costly and too rigid for the company’s growing needs. As cash flow issues persisted, it became clear they needed a more flexible and affordable financial solution.

A tailored working capital package

At this critical juncture, the company turned to their trusted commercial finance broker for advice. With years of experience helping businesses navigate financial challenges, the broker quickly identified that the business’s cash flow problems stemmed from their aged receivables and restrictive financing terms. The broker suggested exploring financing options with Octet, a specialist in providing tailored working capital solutions.

Octet assessed the business’s needs and offered a comprehensive financing solution.

“We were able to tailor a facility that included a $12 million debtor finance facility, which allowed the business to release cash tied up in unpaid invoices, providing immediate working capital for ongoing operations,” said Dan Verdon, Octet’s Director Working Capital Solutions – NSW.

Octet also provided a $100,000 trade finance facility to support the company’s operational needs and a $400,000 term loan to refinance the fleet of vehicles, previously financed by another lender.

With Octet’s flexible financing terms, the company was able to eliminate the restrictive 10% holding limit from its previous lender and gain access to better pricing. “This provided the business with the financial room to reinvest in its operations, complete ongoing projects, and continue expanding its workforce,” added Dan.

Cash flow freedom for future growth

The impact of Octet’s working capital solution was immediate. By unlocking cash flow tied up in receivables, the business was able to pay suppliers on time, meet payroll obligations for its large workforce, and continue bidding for new projects. The trade finance facility helped cover operational costs without depleting their working capital reserves, and the term loan for asset finance ensured their vehicle fleet could continue supporting projects nationwide.

“The combination of the facilities we structured provided the business with a solid financial foundation, allowing management to focus on their core operations without worrying about cash flow gaps,” explained Dan.

The streamlined financial solution also freed up valuable time for long-term strategic planning and growth initiatives.

With the broker’s expert advice and Octet’s support, the business is now well-positioned to continue expanding its safety services across major infrastructure projects in multiple states. Their newfound financial stability, combined with a strong company culture focused on employee well-being, has allowed them to reinforce their presence in the industry and remain a key player.

Grow your business with Octet

Via our Referral Partner Program, Octet empowers businesses across a range of industries, including labour hire, transport and construction, offering innovative Debtor Finance and Trade Finance working capital solutions.

Speak to our team of working capital specialists to see how we can power your business growth today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

How a GP practice overcame cash flow challenges with Octet’s Points4Pay

Posted on October 9, 2024February 17, 2025 by Russell Walsh

General practitioners (GPs) and healthcare practices often face unique financial challenges, especially when navigating payroll tax compliance and managing payments to contracted doctors. One GP practice, with 16 contracted doctors, found themselves in a precarious situation, caught between complying with payroll tax regulations and ensuring smooth cash flow.

The healthcare practice then partnered with Octet Finance, who helped them overcome their cash flow challenges while streamlining their payment processes. The introduction of Octet’s innovative solution, Points4Pay, not only helped the practice maintain its financial health but also offered tangible benefits to its doctors.

The payroll tax challenge in healthcare practices

In recent years, the healthcare industry, particularly GP practices, has been facing increasing scrutiny over payroll tax compliance. Practices that employ contracted doctors must navigate complicated tax structures, and any misstep could result in penalties or audits from the Office of State Revenue. For this particular GP practice, the uncertainty surrounding payroll tax rules led to concerns about how they structured their Service and Facility Agreements.

Historically, the practice collected 100% of patient fees upfront and then paid the doctors after deducting a 35% service fee. However, based on advice from their accountant, the practice was advised to restructure their payment flow. The contracted doctors would now collect 100% of patient fees upfront and remit the service fee back to the practice fortnightly. While this arrangement provided better alignment with payroll tax requirements, it created a significant cash flow gap.

The practice suddenly found themselves facing delays in receiving the service fees, resulting in less cash available for operating expenses. This delay, compounded with administrative inefficiencies in tracking and collecting service fees manually, put the practice at risk of financial instability.

Partnering with Octet to identify cash flow solutions

Recognising the widespread cash flow issues facing GP practices and other healthcare businesses with contracted doctors, Octet created, Points4Pay, specifically designed to address these cash flow gaps while reducing administrative burdens and offering additional perks to practitioners.

As Tim Bowring, Head of Sales for Health at Octet, explains: “We saw that healthcare practices were struggling with cash flow and compliance issues related to payroll tax. Points4Pay offers a seamless solution that not only addresses these challenges but also provides real value to both the practice and the practitioners.”

Points4Pay operates by acting as an intermediary between the practice and its contracted doctors. Here’s how it worked for this GP practice.

Procurement limits for practitioners

Points4Pay provided small procurement limits to each of the practice’s 16 doctors, similar to a credit card, to pay for the services provided. This ensured that doctors could receive 100% of patient fees without delay, while Octet managed the remittance of service fees to the practice.

Fast payments to the practice

Rather than waiting weeks to receive service fees from the doctors, the GP practice now received payments from Octet within 24 hours. This significantly improved the practice’s cash flow, ensuring they had enough liquidity to cover their operational expenses.

Reduced administrative burden

With Points4Pay, the manual debiting of service fees was eliminated. Instead of relying on cumbersome direct debit processes, the practice could upload the details of the service fees owed into the Points4Pay system. Octet then facilitated the entire transaction, easing the workload on the practice’s admin team.

Loyalty incentives

The product also introduced a frequent flyer points program for practitioners. By using Points4Pay to remit their service fees, doctors earned uncapped frequent flyer points on their spending, adding an extra layer of value and loyalty to the practice.

Improved cash flow and stronger relationships

The impact of Points4Pay was immediate and measurable. The GP practice no longer had to worry about cash flow delays or administrative inefficiencies. With the ability to receive service fees within 24 hours, the practice was able to maintain steady cash flow, covering payroll and other operational costs without delays.

“Points4Pay doesn’t just fix cash flow issues,” says Tim. “It provides a true, arms-length, procurement model, simplifying the payment process and strengthening the relationship between the practice and its practitioners, through offering tangible benefits and rewards. It’s a win-win for everyone.”

The frequent flyer points program also became a major selling point for the practice. Doctors appreciated the added value of earning points on their service fees, which could be redeemed for flights and other rewards. The loyalty program helped the practice retain its existing doctors while also attracting new talent.

How Points4Pay supports healthcare practices

For GP practices and other healthcare businesses, cash flow management is critical to success. Payroll tax compliance, combined with the complexities of collecting service fees from contracted doctors, can create significant financial pressure. Octet’s Points4Pay provides a smart solution that:

Improves Cash Flow: By accelerating service fee payments to the practice, Points4Pay reduces days sales outstanding (DSO), ensuring practices have the liquidity they need.
Lowers Administrative Costs: The streamlined process for collecting service fees significantly reduces the administrative workload for the practice’s staff.
Enhances Practitioner Relationships: By offering pre-approved finance and the opportunity to earn frequent flyer points, Points4Pay provides additional value to practitioners, improving retention and recruitment.

For healthcare practices grappling with payroll tax compliance and cash flow gaps, Points4Pay offers a comprehensive, compliant solution that improves financial health while delivering added benefits to both practices and practitioners.

As payroll tax regulations continue to evolve, healthcare practices need a reliable financial partner that understands their unique challenges. Tim concludes, “With Octet’s Points4Pay, this GP practice is not only compliant but thriving, having transformed their payment structure into a seamless, rewarding process.”

Get in touch

Discover how Points4Pay can benefit your practice and your contracted practitioners. Register your interest or reach out to our team for more information:

Email: points4pay@octet.com
Phone: Call our Healthcare Finance Specialists on 1300 862 838

Octet’s working capital finance solutions for the healthcare industry help by unlocking the opportunities in your supply chain. We also collaborate closely with commercial finance brokers across a wide range of industries. If you have clients who could benefit from Points4Pay or other supply chain finance solutions, such as Debtor Finance or Trade Finance, contact us today.

Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.

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