working capital Archives

Election 2025: How the major parties’ policies compare for SMEs

Posted on April 22, 2025April 22, 2025 by Russell Walsh

With the Australian federal election looming on May 3rd, Australia’s major political parties are sharpening their pitches – not just to voters, but to the country’s 2.5 million small and medium-sized businesses.

From tax write-offs to workforce reform, the policies proposed by Labor and the Coalition reflect different visions for the future of Australia’s economy.

In this guide, we break down the headline business policies from each of the major parties.

Labor – Short-term relief and workforce reform to support a sustainable economic recovery

Labor is leaning toward short-term financial relief and structural workforce reform when it comes to supporting businesses, with longer-term incentives tied to sustainability and skills development. Here’s what’s on the table:

Instant asset write-off: Many small businesses were surprised when the budget didn’t include an extension to the instant asset write-off. But Labor has said it will extend the policy by 12 months if it wins the election. The party’s rationale for an extension rather than making the write-off permanent – which the Coalition has proposed – is to encourage businesses to invest in growth now.

Power bill relief: Labor plans to reintroduce the $150 electricity rebate for households and small businesses, paid in two instalments from July 2025. This is part of a wider plan to ease energy cost pressures amid ongoing cost of living and inflation concerns.

Apprenticeship wage support: A $10,000 bonus wage for apprentices in the housing and construction sector is on Labor’s agenda, to be paid over the course of training to tackle skills shortages and support its housing targets.

Ban on non-compete clauses: Labor announced plans to ban non-compete clauses for workers earning under $175,000 in this year’s budget, which will come into effect in 2027. The treasurer, Jim Chalmers, said the clauses were “holding too many Australian workers back from going to better-paid opportunities or setting up small businesses”.

Investment in energy transition: Labor continues to support clean energy policies, including funding for renewable infrastructure. While less directly tied to SMEs, these investments aim to lower long-term energy costs and create supply chain opportunities in emerging sectors.

Coalition – Tax cuts and deregulation to boost growth and confidence

The Coalition’s business policies centre on tax relief, deregulation, and incentives that aim to stimulate economic activity and reduce red tape for SMEs. Here’s a breakdown of the key proposals:

Instant asset write-off: The Coalition has committed to lifting the instant asset write-off threshold to $30,000 for businesses with an annual turnover under $10 million, and making the scheme permanent.

Meals and entertainment deductions: Under this proposal, eligible businesses will be able to deduct up to $20,000 annually for dining and entertainment expenses (excluding alcohol). The policy is pitched as a way to support the hospitality sector.

Fuel excise cut: In response to cost-of-living concerns, the Coalition proposes halving the fuel excise for one year, reducing it from 50 to 25 cents per litre, which could lower transport and logistics costs for SMEs.

Apprenticeship hiring incentive: The Coalition plans to implement a $12,000 incentive for SMEs to hire new apprentices or trainees in priority sectors, such as construction. The payment would be staggered over the apprenticeship term, providing ongoing support for employers.

Right to disconnect repeal: The party wants to reverse newly implemented “right to disconnect” laws, which allow employees to ignore unreasonable after-hours work communications without penalty.

Vehicle efficiency standards rollback: The Coalition wants to scrap the New Vehicle Efficiency Standard (NVES), which requires automakers to meet emissions targets. They argue the NVES raises costs for popular vehicles used by individuals and small businesses.

Industrial relations deregulation: The Coalition has indicated it would repeal several of Labor’s recent industrial relations changes, although specific reforms haven’t been fully detailed.

Australian Greens – Support for small businesses and local economies

The Greens policies for small businesses are “focused on giving small businesses and cooperatives the support they need to thrive in tough economic times”. Key policies include:

Grants for small businesses: The Greens want to support small business growth and innovation by establishing an incubator, which will provide 1,000 grants of $250,000 and 10,000 grants of $50,000 – $75,000 for startups and cooperatives that “enhance local economies and create jobs”.

Instant asset write-off: Like Labor, the Australian Greens have proposed extending the $20,000 instant asset write-off and the Small Business Energy Incentive Scheme to 1 July 2026.

Teal Independents – Focused on simplifying regulations

The Teal Independents haven’t announced any specific policies for small businesses, however, they are pushing to reduce “red tape”.

Small business definition: Late last year, eight independent federal MPs signed a letter to Employment Minister Murray Watt, calling on him to change the definition of “small business” from 15 employees to 25.

Tax reform: Allegra Spender, independent member for Wentworth, has also advocated for tax reform. “I don’t have any particular views on the answers, but I am saying that we need to put [proposals to increase taxes including the GST, superannuation and abolishing negative gearing] on the table and properly consider them,” Spender said to the Financial Services Council.

What should businesses take away from the election policy debate?

Both Labor and the Coalition have made clear overtures to SMEs – but their strategies reflect different philosophies. There are some clear winners, including the construction and hospitality sectors.

No matter which party wins the Federal election, businesses will need to stay agile. Changing policy landscapes create both opportunities and risk. Being prepared – and well-informed – will be key to making the most of what’s ahead.

While the election outcome is yet to be decided, Octet helps businesses prepare for uncertainty and risk. We offer fast, flexible funding solutions, such as Trade Finance and Debtor Finance, to manage cash flow, drive growth and support your goals. Connect with our team today to explore how we can power your business.

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.

Growth finance: how flexible business finance funds progress

Posted on October 1, 2024November 27, 2024 by Russell Walsh

Businesses face many challenges, and when they strive to grow, they often find that growth hampered by inadequate funding, or working capital. So how do they evolve?

In this article, discover the factors that limit business growth and explore why using cash in the bank or profits is sometimes an unsustainable approach to funding growth. If you’re ready to progress your business, it’s time to consider growth finance and find out how tailored working capital solutions can provide the right support for sustainable growth.

Growth challenges: why most businesses fail to grow

Is your business failing to grow despite your best efforts? Business growth can be difficult at the best of times, but in an environment of global uncertainty, rising inflation and slowing economies, even the world’s most successful companies are struggling to increase revenues.

McKinsey & Company conducted a wide-reaching study of the growth and performance of the 5,000 largest public companies in the world over the past 15 years. The average revenue growth in the 10 years before COVID-19 was just 2.8% a year. Only one in eight businesses surveyed enjoyed a growth rate of more than 10% a year. The post-COVID-19 years haven’t been any easier.

Economic conditions aside, businesses also make common mistakes when trying to expand. Octet’s NSW Director of Working Capital Solutions, Dan Verdon, identifies a few factors that can hinder meaningful growth and, therefore, profits.

A need for more strategic planning. “Businesses with a well-defined and communicated strategy, which aligns with their short-, medium- and long-term goals are much more likely to be successful.”
A need for more capital. “Most businesses underestimate the level of capital required for sustainable growth.”
A need for understanding where cash flow is tied up in the business. “There are four main cash flow levers: accounts payable, accounts receivable, inventory and their own cash. Understanding how to use each of those sources and when is really important.”
Scaling too quickly. “A lot of businesses might have a good product or a good service, but they grow too rapidly and then can’t sustain it.”
A need to acquire and retain talent. “Attracting and retaining good people, especially in highly skilled roles, is a major challenge for a lot of new businesses.”

The sustainable way to grow

For the best chance of success, it’s also important to identify where to concentrate your growth efforts. McKinsey & Company has discovered that businesses give themselves a much greater chance of outperforming when they invest in three pathways for growth:

Expanding the core business by focusing on excellence in the areas in which they currently operate.
Innovating in adjacent markets by seeking ways to adapt to serve new customers.
Developing breakout businesses by identifying and exploiting new opportunities.

“Having a finance partner who can help you understand what levers to pull and unlock cashflow tied up in your business can help growth in all three areas,” says Dan.

Leveraging business growth finance for expansion

To fund their growth, many businesses set annual budgets based on previous yearly figures and use internal sources of funds, such as their profits or cash in the bank, rather than external financing, such as a loan or line of credit. However, this approach can affect profitability and hamper growth by leaving businesses without the financial flexibility to invest in innovation. While avoiding debt might seem preferable, if profits are down or cash flow slows (say, due to customers taking longer to pay their bills), a business’ ability to scale, innovate and compete effectively is seriously impacted.

As we head into 2024, the economic challenges of high inflation, rising costs and a slowing global economy will continue to put a strain on business profits. Using finance to fund expansion makes sense. “Working capital facilities can support and encourage sustainable growth,” says Dan. “They are self-liquidating, so come with fewer risks than, say, a traditional fixed-term bank loan.”

How Octet can assist with financing business growth

So what are working capital finance solutions, how do they fund expansion and how can a financier such as Octet support business growth?

A streamlined working capital solution, such as Debtor Finance, (also known as invoice finance) allows businesses to access funds tied up in unpaid invoices to accelerate cash flow. By freeing up this cash, a business can capitalise on growth opportunities. This could include importing goods from new suppliers and exploring different product lines.
Looking to expand into different regions? Octet can support your business through a Trade Finance facility. Dan explains: “Say the business is in Australia and wants to expand into another country, but they can’t get finance facilities in that country. With Octet’s facility, they can donate a portion (or all) of the limit to the overseas entity (subject to the Australian parent’s credit assessment) and then use that funding for their overseas business growth requirements.”
An Octet Term Loan allows businesses to borrow up to $2 million, with flexible terms ranging from three months to three years, to unlock additional working capital to expand operations or acquire new assets.
Octet can help your business with the process of onboarding new local or overseas suppliers. “We do the verification checks of those suppliers so the business knows they’re trading with someone who is legitimate.”
Octet tailors our flexible funding solutions to a business’ needs. “We bring all the different working capital solutions – debtor finance, trade finance, credit cards – into one smart ecosystem.”
Octet helps businesses increase the visibility of their entire supply chain, allowing them to see and act on potential blocks or gaps. Supply Chain Accelerate is a flexible funding solution that pays 100% of supplier invoices instantly, while giving businesses up to 90 days to repay.

A finance solution that grows with you

Octet has a suite of fast, flexible finance solutions we can tailor to power your business growth. Speak with our team of working capital experts today to discover what’s possible for 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.

Why supplier relationships matter and what you can do to improve them

Posted on October 1, 2024November 21, 2024 by Duncan Khoury

When you’re busy growing a business, it can be easy to focus on day-to-day operations and let the big picture take a backseat. For many buyers, this can see them taking their suppliers for granted and expecting them to deliver more, without first building the foundational relationship to support it.

Supply chain pressures have continued to evolve post-COVID, reshaping how businesses manage their relationships. While the immediate crisis may have passed, ongoing global challenges—such as geopolitical tensions, inflation, and technological disruption—are now pushing more businesses to recognize the benefits and necessity of strategic buyer-supplier relationship management. A stronger relationship between your business and its suppliers makes it easier to negotiate, meet your customer’s needs, and seize opportunities to grow together.

This article explores why it’s critical for businesses to go beyond building efficiency and cost-effectiveness in their supply chain strategy, and invest in fostering stable, reliable supplier relationships.

A close supplier-customer relationship is a win-win

While businesses often focus on the customer, the relationship between a business and its suppliers is about much more than just transactions. From navigating challenges together to negotiating stronger deals, building longstanding relationships is in both parties’ best interests.

Instead of a one-sided power dynamic, successful relationships are mutually beneficial partnerships. They create a collaborative environment where trust and cooperation replace purely transactional exchanges.

The risk of a one-sided business relationship

Despite the benefits of balanced partnerships, some businesses still struggle to recognize and respect this dynamic. Since its introduction in 2021, Australia’s Payment Time Reporting Scheme (PTRS) continues to play a key role in encouraging transparency and fairness between businesses, particularly with large corporations and small suppliers.

Businesses failing to pay on time not only face financial penalties but also risk serious reputational damage. Recent examples from 2023 and 2024 show how late payments have tarnished reputations in sectors like manufacturing and retail. Some large, well-known businesses have faced criticism for delayed payments, underscoring the importance of maintaining timely financial practices to protect their reputation.

This highlights the importance of being transparent about and managing your financial supply chain. Additionally, leveraging tools like fairly-negotiated early payment discounts as an incentive to strengthen supplier relationships remains an effective strategy. Businesses that do this create better relationships with their suppliers, ultimately offering an added cash flow benefit to their client rather than a default payment choice.

It’s about the intention behind the incentive.

Good relationships are worth the investment

Beyond compliance and reputational risk considerations, businesses that foster close supplier-customer relationships stand to gain significantly. Building these relationships by taking the time to get to know your suppliers, their business goals and the way they operate, can bring a host of benefits.

These include:

simplifying complex negotiations
securing better deals
reducing quality control issues and delays
supporting new product or sales initiatives
improving efficiency
enhancing customer service

Together, these factors create a unique competitive advantage that is difficult for competitors to replicate.

How to build business relationships with suppliers

There are several ways to improve your relationship with suppliers and set the foundations for a long-term partnership, apart from discovering how supply chain finance works.

Choose suppliers with values that align to yours

Building strong relationships is easier when you work with suppliers whose values align with your own. For example, if your business prioritizes sustainability, partnering with suppliers offering eco-friendly solutions strengthens both the relationship and your brand’s commitment to these values.

Maintain clear, consistent communication

Clear communication is the backbone of successful partnerships. Misunderstandings or unclear expectations can lead to delays and friction, impacting customer satisfaction. Ensure communication is two-way and well-structured by:

Using accessible communication tools
Clarifying terms, standards, and expectations upfront
Scheduling regular touchpoints to address updates and issues

Consider cultural differences

Global supply chains now face new challenges, including geopolitical and cultural considerations. Understanding cultural sensitivities and business practices in your suppliers’ regions can help build rapport and avoid misunderstandings. When in doubt, local consultants or in-depth research can help navigate these complexities effectively.

Establish clear processes

Streamlined processes reduce errors, delays, and frustration for all parties involved. Investing in automation tools and digital platforms not only enhances efficiency but also signals your commitment to operational excellence. Clear financial processes, such as prompt payment systems, further solidify trust.

Reward loyalty

Loyalty is key to fostering long-term partnerships. Instead of focusing solely on the lowest cost, businesses are increasingly recognizing the value that responsive, high-quality suppliers bring. Rewarding loyalty with consistent contracts or exclusive opportunities strengthens relationships while contributing to your operational resilience.

Relationships first

In 2024 and beyond, strategic supplier relationships remain a cornerstone of business success, even as industries embrace rapid technological advancements. Building people-centered partnerships not only ensures smoother daily operations but also positions your business for long-term growth and adaptability.

By fostering collaborative, mutually beneficial relationships, you can create a unique advantage that allows you to thrive in an increasingly complex environment.

Interested in building stronger relationships with your suppliers? Get in touch today to discover how Octet can help.

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.

Financing trends: business game-changers in 2024 and beyond

Posted on September 30, 2024October 17, 2024 by Russell Walsh

The world of finance is evolving rapidly. Disruptive technologies, an increasingly connected financial landscape, and global uncertainty are challenging traditional finance models. The financing trends that have shaped previous years are evolving, while innovative new products are forcing businesses to rethink their approach to funding.

So, what are the trends in financial services that will shape the rest of 2024 and beyond? We explore six key trends that could change the way we all do business.

6 financial services trends in 2024 and beyond

1. Blockchain technology in financial services is on the rise

Blockchain technology, often associated with cryptocurrencies, extends beyond digital currencies to a range of industries and users.

In 2024, its application for supply chain management in small-to-medium-sized businesses is gaining traction. Blockchain-based invoice financing is transforming cash flow management by offering increased transparency, security, and efficiency, which can lead to a reduction in costs and a streamlining of processes.

“A prominent application of blockchain technology is decentralised finance,” says Octet’s Co-CEO, Brett Isenberg. “In traditional centralised finance, consumers and businesses borrow from a bank or via a broker. Decentralised finance challenges this by allowing peer-to-peer exchanges.”

While blockchain tech is currently used in the finance sector, Brett believes its use will increase exponentially in the years to come.

2. The industry is embracing AI and data analytics in financial services

Artificial intelligence (AI) and machine learning (ML), which provide insights and solutions at unprecedented speeds, are being used in tasks such as research and fraud detection. In 2024, there has been an even greater uptake of these tools with AI-driven supply chain management tools being used to help businesses predict disruptions, optimise logistics, and manage inventory more effectively.

“AI and data analytics have transformed the finance industry,” says Brett. “AI algorithms can analyse large data sets to identify anomalies that detect fraudulent activities and measure risks with greater accuracy than ever before.”

These technologies will also be increasingly used to enhance efficiencies, make decisions and improve customer service. “AI-powered chatbots and virtual assistants are getting better and better,” adds Brett. “The technology is also enabling more accurate and dynamic credit scoring by considering a much broader range of factors.”

3. Global growth has remained weak

In late 2023, the resilience of the global economy exceeded expectations, but global economic growth continues to face challenges in 2024. Political tensions, interest rate fluctuations, and economic policies are impacting financial services worldwide. China’s recovery has been weaker than forecast, global core inflation is rising, and high public debt continues in many countries. These factors had led the OECD to project lower global growth in 2024 compared with 2023.

In Australia, the Reserve Bank has kept interest rates on hold since November 2023, despite political pressure for cuts.

“This decision reflects ongoing concerns about inflation and economic stability”, states Brett. “Globally, many countries have cut rates to stimulate growth, but Australia’s unique economic conditions have led to a different approach.”

As such, businesses of all sizes must navigate these complexities to manage their cash flow and investment strategies effectively.

4. Increasing cybersecurity concerns

As financial transactions become more complex and frequent, cybersecurity remains a critical concern.

In 2024, Australia has seen a significant rise in data breaches, with notable incidents affecting millions of individuals. The Office of the Australian Information Commissioner (OAIC) reported a 9% increase in data breach notifications in the first half of 2024 compared to the previous six months.

Enhanced cybersecurity measures, such as multi-factor authentication and advanced threat detection, are essential to protect assets and maintain trust in financial services.

When combined with disruptive technologies such as AI and a shift to cloud-based systems, financial service providers will have to become more adaptable to protect their customers and offer the best services. Business leaders are being compelled to develop new strategies and explore innovation to counter challenges to security systems.

5. Innovative financial products are more readily available

While challenges are increasing, so too is innovation. The range of financial products available to businesses and consumers is growing, and as more businesses and consumers adopt digital solutions, new technologies and financial services have emerged.

“For example, a growing environmental awareness has increased the focus on sustainable financial products. So, there are now green bonds and sustainable investment funds,” says Brett. “Healthcare supply chain financing is an emerging area too.”

“Another innovation is the tokenisation of assets, which involves converting real-world assets into digital tokens on a blockchain. This has led to the creation of tokenised securities and other asset-backed tokens.”

6. Banks are being forced to embrace change

The banking industry is facing challenges from a slowing global economy, divergent economic conditions and disruption to their general business models. evolving financial landscape. Traditional banks must adapt amid higher interest rates, stricter regulations, climate change and technological advancements. Banks are now having to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers. This shift is essential for improving customer service and engagement, helping banks retain important business customers.

“Traditional financial institutions have obviously been embracing tech for years, but it’s only in more recent times that it’s really pervaded certain products based upon business demand,” explains Brett. “At Octet, we have fundamentally changed the way buyers and sellers engage with each other on one platform — both in a local and international trading context. Traditional banks are also starting to invest in robust platforms and adopt open banking requirements to collaborate with third-party providers.”

Brett says banks are increasingly being forced to improve their customer service and engagement to retain important business customers.

The future of finance

Our innovative working capital solutions help you unlock the power in your business to thrive. Need a cash flow injection without the need for personal asset security? Our Debtor Finance facility allows you to convert up to 85% of your unpaid invoices into immediately available funding.

If it’s a revolving line of credit you’re after, our Trade Finance facility offers up to 60 days interest-free and 120-day repayment terms to pay local and international suppliers.

You can also unlock additional working capital to expand operations, acquire new assets or consolidate existing debt by activating an Octet Term Loan as part of your Debtor or Trade Finance facility.

Discover how Octet’s team of working capital specialists can help 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.

Explore your options: How to get a business loan alternative in the freight and transport industry

Posted on August 20, 2024November 19, 2024 by Duncan Khoury

Whether you’re operating long-haul or last-mile, one factor is crucial to transport industry success: healthy cash flow. It’s why transport and freight companies need solid financial partners in order to go the distance and strive for growth.

One option for improving your cash flow is exploring how to get a business loan from a bank. But a traditional loan has its limitations. The good news is there are many viable working capital alternatives that can drive your business to succeed.

Let’s begin by looking at some of the key challenges in the industry before reviewing available business funding options.

The industry challenges driving different types of business loans and funding solutions

In recent years, several challenges have significantly impacted the Australian transport and freight industries. Notably, volatile fuel prices and inflationary pressures on wages and operational costs continue to strain cash flow. Some persistent issues include:

high operational costs to cover vehicle maintenance, repairs, road user charges, toll charges, insurance, vehicle parts, vehicle registration and driver training and accreditation
Lengthy customer payment times with many businesses experiencing 30+ day payment terms
limited ability to pass on cost increases. For example, only a small percentage of trucking businesses can viably pass on increased fuel costs to customers, according to the Australian Trucking Association’s latest research

Allan Howe, Octet’s Working Capital Solutions Director for Queensland, notes that the cash flow squeeze caused by these challenges makes reliable funding solutions, such as freight finance, so vital for industry success.

“Typically, there is a cash flow gap in any transport operation,” Allan says. “You’ve got fixed costs such as insurance, wages, licensing and permits. Then, there’s your ongoing variable costs like fuel, maintenance and repairs. To compound matters, you’re generally only getting paid by customers every 30 to 40 days. Transport finance is therefore crucial in helping you to cover the cash gap.”

The limitations of traditional funding and business loan options

Traditional funding options for the transport and freight industry include:

Term business loans – usually in the form of a single disbursement that is repaid on a set schedule
Lines of credit – providing access to a set amount of funds where required
Bank overdrafts – offer access to extra funds when your businesses transactional account balance reaches zero

Businesses may choose between unsecured or secured traditional funding options, though many choose secured alternatives due to the higher interest rates generally associated with unsecured funding.

Allan says a major downside of traditional, secured funding options is that they tend to be property-backed, irrespective of whether it’s a standard bank loan, line of credit or bank overdraft. “As a result, many business directors use their own private assets as security to get funding,” he adds.

In addition to the risks associated with entangling personal assets with business assets, Allan cautions that traditional asset-backed funding options may have limitations for business growth.

“Property-backed traditional funding options will always be limited in their ability to release working capital to the business, and they won’t generally grow in sync with it. The funding options are only as flexible as the property’s value.”

Unlocking the power of trade finance and invoice finance for your transport business

Smarter, faster working capital funding alternatives to traditional bank loans are available. These include:

A trade finance facility, which is a flexible business line of credit where your financier pays your suppliers immediately while you repay your financier over time.
A debtor finance facility (also known as invoice finance) that enables a business to transform its accounts receivable into readily available cash. This process is sometimes referred to as freight factoring in the transport industry.
A term loan that unlocks additional working capital to expand operations or acquire new assets by as part of a Debtor Finance or Trade Finance facility.

Allan says that unlike traditional business funding options, alternative working capital solutions are designed to be flexible to grow with your business.

“If you get a bigger contract, your revenue may increase by 25% overnight. Your balance sheet must be able to support that. Working capital solutions can support this growth faster than traditional property-backed financing, where your funds are often limited to the property’s value.”

Allan emphasizes that dissatisfaction with traditional financing options has led many transport and freight companies to seek more innovative working capital solutions, like Octet’s debtor finance, to fund their growth.

“Many transport businesses come to us after a traditional financier has given them a property-backed overdraft. They’re frustrated. They can’t take their business to the next level because they need to increase their overdraft from $1 million to $2 million. Yet with a property-backed overdraft, they simply couldn’t get any further.”

The solution?

“Octet can tailor a debtor finance facility to suit your business needs. For example, one company we worked with in the transport and logistics industry was able to get increased working capital via our debtor finance solutions, with their funding limit recently doubling, minus the need to use personal assets as collateral.”

Go further with Octet’s working capital solutions

Your transport business needs a trusted finance partner to power its growth potential. Explore Octet’s range of intelligent working capital solutions to discover which product is right for your business. Contact our team of working capital specialists 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.

Understanding Working Capital Finance: A key tool for business growth

Posted on August 13, 2024September 10, 2024 by Russell Walsh

Working capital finance is a crucial business finance solution that helps organisations maintain adequate cash flow to effectively manage operational costs, invest in new distribution streams and expand into new products or markets without accessing their cash reserves. This type of financing addresses short- to medium-term needs, enabling businesses to cover essential expenses like stock, payroll, equipment and accounts payable. It can also assist businesses with accelerating the cash flow around their outstanding commercial invoices.

Commercial finance brokers play a vital role in helping businesses access working capital finance. These brokers facilitate various financing options to bridge gaps between cash inflows and outflows, especially during slow receivable periods or seasonal fluctuations. For commercial finance brokers, understanding the intricacies of working capital finance is crucial to advising business owners and financial decision-makers effectively.

When and how to access working capital finance

Working capital finance is primarily used by small-to-medium sized businesses across a wide range of industries, including retail, manufacturing, labour hire and healthcare services. These businesses often face cash flow challenges due to slow receivables, seasonal fluctuations, or the need to invest in greater inventory levels and more advanced equipment. Commercial finance brokers can identify and recommend the most suitable working capital finance solutions to meet their business client’s unique needs.

Dan Verdon, Octet’s NSW Director Working Capital Solutions, says that applying for working capital finance typically involves assessing the business’s cash flow needs and selecting the appropriate financing option. According to Dan, brokers support businesses in this process by evaluating their financial health, understanding the cash flow cycle, and recommending tailored funding solutions.

“For instance, a manufacturing company with a substantial accounts receivable might benefit from debtor finance, while a healthcare business importing medical consumables needing to pay overseas suppliers promptly will likely find trade finance more advantageous,” explains Dan.

Common types of working capital finance

Dan says it is important to understand the different types of working capital finance, how they work, and what’s best for the business’ situation.

“Navigating the various types of working capital is essential for optimising cash flow and ensuring supply chain management efficiency,” says Dan. “Understanding the best options for the business’ needs can enhance financial stability and provide a competitive edge.”

The various types of working capital finance include:

Debtor (Invoice) Finance: Access funds tied up in outstanding business invoices, providing immediate, personal security-free cash flow based on the accounts receivable.
Trade Finance: A revolving line of credit allowing businesses to pay their local and global suppliers quickly, improving cash flow and speed to market.
Term Loans & Asset Finance: Quick funding with fixed repayment schedules, ideal for immediate cash flow needs.
Trade Credit: Suppliers extend payment terms, allowing businesses to defer payments for goods and services, thereby managing cash flow more effectively.
Lines of Credit: Flexible access to funds up to a predetermined limit, allowing businesses to withdraw as needed.
Bank Overdraft: A short-term financing option that allows businesses to withdraw more money than is available in their account, up to an agreed limit.

The benefits of working capital finance

The benefits of working capital finance can be substantial. It improves cash flow, supports efficient operations, and enhances the business’s ability to seize growth opportunities. “By leveraging these financing options, businesses can maintain short-term stability and focus on long-term success, ensuring resilience and adaptability in a competitive market,” states Dan.

However, it is important to align the strategic implementation of supply chain financing with the requirements of the business. Some aspects to consider are:

Align financing with cash flow cycles: Ensure that the chosen finance solution matches the business’s cash flow patterns to avoid repayment stress.
Diversify financing sources: Utilise a combination of finance options to spread risk and maintain flexibility.
Monitor financial health: Regularly review the business’s financial performance and the total cost of any external finance facility to adjust strategies as needed.
Leverage relationships: Develop strong relationships with suppliers and financiers to negotiate better terms and rates

For commercial finance brokers, understanding and effectively communicating these aspects of working capital finance can have a significant, positive impact on the financial health and growth of their clients.

How to Calculate Working Capital

Understanding how to calculate working capital is fundamental for effective financial management. Working capital is the difference between a company’s current assets and current liabilities. The basic formula for calculating working capital is:

Working Capital = Current Assets – Current Liabilities

Current Assets	Cash and anything that can be converted into cash within a year, eg raw materials, accounts receivable, inventory, stocks, and bonds.
Current liabilities	Bills which are due to be paid within a year, eg accounts payable, payroll, tax, and overheads.

This formula provides a snapshot of a company’s short-term financial health and operational efficiency. Positive working capital indicates that a company can cover its short-term liabilities with its short-term assets, which is crucial for maintaining smooth operations and supporting business growth.

Octet Working capital solutions – powering business growth

Octet’s tailored working capital financing and payment facilities help businesses effectively manage their cash flow and facilitate sustainable growth. With Octet, businesses can:

access a flexible line of credit to power business trade
leverage unpaid invoices to access fast working capital
expand business operations with a flexible, tailored loan
use existing credit or debit cards to pay suppliers
streamline payments and take control of the supply chain.

We offer a comprehensive suite of financial solutions to empower businesses with the capital they need to thrive.

Debtor Finance

This solution helps manage cash flow by providing immediate access to up to 85% of unpaid business invoices, without the need for personal asset security.

Trade Finance

Set flexible supplier payment terms with up to 60 days interest-free and 120 days repayment, whilst enjoying bank-beating FX rates.

Term Loan

Flexible finance for a range of business needs including investment in new assets, consolidation of loans or equipment purchase.

Octet Pay

Use business credit cards or other payment sources to pay any invoice. Benefit from market-leading FX rates when paying international suppliers.

Supply Chain Accelerate

A fast and flexible solution that pays 100% of supplier invoices with up to 90 days to repay.

Supply Chain Management Platform

Our innovative digital platform makes it easy to track, validate and authorise across each stage of a transaction.

Discover how to partner with Octet today

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. If you’re a business decision-maker and want to know more, get in touch with the team today.

Or if you are a commercial finance broker with clients who could benefit from smarter working capital solutions, our Referral Partner Program empowers businesses across a range of industries with innovative working capital solutions.

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

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.

Global tensions impacting local supply chain management

Posted on April 17, 2024June 3, 2024 by Russell Walsh

When it comes to complex and interconnected global trade, robust supply chain management practices are increasingly important to ensure your business is operating as efficiently as possible. As your business navigates through current geopolitical turbulence and economic uncertainties, the importance of having strong supply chain strategies becomes even more important. These global issues need to be considered not only in the context of supply chain management, but also in terms of critical external funding and cash flow solutions including supply chain finance, trade finance and debtor or invoice finance.

Impact of recent geopolitical events: Iran Drone Strike on Israel

The recent Iran drone strikes on Israel have sent shockwaves across international borders, igniting concerns over heightened tensions in the Middle East. As geopolitical tensions escalate in this already volatile region, businesses worldwide are left to grapple with the potential repercussions on their supply chains and such critical items as oil, iron ore and other natural resources. With inflation and interest rate volatility still a key concern here in Australia and other countries, robust supply chain management will continue to be a vital tool for mitigating risks and ensuring operational resilience.

By integrating risk assessment practices into your businesses supply chain management, you can proactively identify vulnerabilities and implement contingency plans. From diversifying supplier networks in other regions (or locally where possible) to leveraging advanced technologies for real-time monitoring, you can help to protect your businesses supply chain against geopolitical disruptions. On face value most of these global events appear a literal world away, but the impacts often hit a lot closer to home on real world items such as fuel and shipping container costs.

Strategic importance of China ties in supply chain management

Navigating this scenario could become even more intricate due to China’s involvement. China appears to strive for a delicate equilibrium in its Middle East relations, maintaining robust connections with various stakeholders. Notably, its close ties with Iran have come to the forefront, with reports suggesting Chinese support for Iran’s actions against Israel.

China’s pivotal role in the global economy underpins the strategic importance of its trade relationships. As a leading manufacturing hub and a key player, particularly in Australia’s supply chain networks, China’s economic movements exert significant influence on our fortunes. The interconnectedness of supply chains means that any developments affecting China can reverberate across industries and continents.

For Australian businesses engaged in international trade, maintaining a resilient and diverse supply chain often means spending time understanding China’s economic policies, trade agreements, and geopolitical positioning. The often discussed ‘Chinese housing bubble’, long-term tensions with Taiwan and many other areas have the potential to materially impact the Australian economy, with SMEs particularly vulnerable.

By forging strategic partnerships and adopting agile supply chain management practices, businesses can navigate through uncertainties and capitalise on emerging opportunities in the Chinese market.

Adapting supply chains to global uncertainties

Amidst geopolitical upheavals and geopolitical rivalries, the question arises: How does this affect global and local supply chains? The interconnected nature of modern supply chains means that disruptions in one region can trigger cascading effects across the entire network. From transportation delays to trade restrictions, businesses must contend with a myriad of challenges in sustaining the flow of goods and services.

Effective supply chain management means taking a proactive approach to risk mitigation, encompassing scenario planning, supply chain mapping, and supplier diversification strategies. By fostering transparency and collaboration across supply chain partners, businesses can enhance their agility and resilience in the face of geopolitical uncertainties.

Navigating geopolitical risks: implications for Australian businesses

For Australian businesses, the evolving geopolitical landscape poses both challenges and opportunities. As a nation heavily reliant on international trade, Australia’s economic prosperity is directly linked to global supply chains. The ramifications of geopolitical events, such as the Iran drone strike and geopolitical tensions in the Asia-Pacific region, reverberate throughout Australia’s economy.

From the mining sector to the agricultural industry, Australian businesses must assess the geopolitical risks inherent in their supply chains and devise strategies to mitigate potential disruptions. One emerging trade partner outside of China is India. In 2023 Australia and India signed the historic India-Australia Economic Cooperation and Trade Agreement (IA-ECTA):

making Australian exports to India cheaper
opening up new import opportunities
creating a slew of new job prospects for Australian businesses

The IA-ECTA is but one avenue that your business can diversify its global trading partners, ensuring that global geopolitical risks such as those currently occurring in the Middle-East and from China through Asia Pacific have a minimal impact on the supply chain and ultimately cash flow and bottom-line profitability.

Easing cash flow challenges via smart working capital solutions

In times of supply chain disruptions caused by geopolitical events, your business will often encounter cash flow challenges due to delayed payments or interrupted production cycles. This is where working capital solutions such as trade finance and debtor finance play a crucial role in mitigating financial strain.

Trade finance provides a flexible line of credit to power your businesses international and domestic trade transactions. It helps you manage the complexities of buying and selling goods and services across borders by providing flexible finance solutions tailored to your needs. Trade finance ensures parties involved in the transaction can navigate issues like payment delays, currency fluctuations and credit risks, enabling smoother and more secure trade operations.

Similarly, debtor finance, also known as invoice financing or receivables finance, offers businesses immediate access to cash by leveraging their accounts receivable as collateral. In the event of delayed payments from customers due to supply chain disruptions, debtor finance provides businesses with the liquidity needed to maintain operations and seize growth opportunities.

By integrating working capital solutions into your business’s financial strategies, you can effectively manage cash flow fluctuations arising from geopolitical events, thereby enhancing resilience and enabling cash flow for long-term growth.

Detailed and strong supply chain management practices are critical for businesses seeking to navigate the complexities of global commerce amidst geopolitical uncertainties. By embracing innovative technologies, forging strategic partnerships, and adopting agile supply chain practices, businesses can enhance their resilience and thrive in an increasingly competitive and global economy.

Octet’s tailored working capital solutions have supported many businesses with supply chain finance strategies. Contact our team of experts today for more information on how we can help power your business.

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.

Managing your healthcare supply chain

Posted on October 31, 2023May 20, 2024 by Duncan Khoury

In the healthcare industry, where patient wellbeing is paramount and life-saving resources are critical, supply chain management is a crucial component of business success. However, healthcare supply chains have become increasingly complex and the events of the past few years have highlighted their vulnerabilities.

So, how do you build resilience in your healthcare supply chain? We explore the challenges to healthcare supply chain management while shedding light on the strategies, innovations and technologies driving sustainable change.

The challenges of healthcare supply chain management

A supply chain is a network of organisations, people and resources involved in producing, distributing and delivering goods or services. In healthcare, supply chain management includes many stakeholders, such as manufacturers, importers, suppliers, healthcare providers, regulatory bodies, government and private services and shipping and transport partners.

The vulnerabilities of supply chains worldwide were highlighted during the COVID-19 pandemic and health policymakers were left searching for quick and practical solutions. For health practitioners, the shortage of consumables, stock and equipment was frustrating and damaging to their business and potentially dangerous for staff and patients. The events of the past few years have highlighted why supply chain management is so important in healthcare organisations.

For Australian healthcare providers, it’s even more complex. Domestic availability of medical supplies in Australia is limited, which means the nation is at the end of a lengthy and complex chain for most of its supplies.

Tim Bowring, Octet’s Head of Sales, Health, has seen the effect on the ground. “For example, we went through a period from the end of the pandemic until very recently where if you ordered, say, a dental chair, it could take six months before it arrived in the country.

“We also saw items such as X-ray machines and specialist equipment to perform surgeries greatly impacted. It led to the largest suppliers having to open bigger warehouses, forecast demand for stock over a long period and then pre-order and store it all here on shore.”

How to build resilience in a health supply chain

While no healthcare provider or supplier can control global disruptions such as pandemics, diplomatic tensions and wars, there are many actions they can take to manage supply chain issues in healthcare and build resilience. Here are our top picks.

Utilising automation and data analytics

“Resilience often comes down to how you manage your stock,” says Tim. “So ordering the right amount of stock, being efficient in your stock usage and having accurate forecasting models for how much stock you’re going to need are all critical areas.”

That’s where data analytics comes in. Important information, such as how to streamline processes, reduce costs and minimise errors, can be obtained by collecting, interpreting and analysing data.

Robotic automation can help with packing orders, while sensors and cameras can be used for quality control. Warehouse management, logistics scheduling, data sharing, processing orders and returns can all be automated.

Focussing on stakeholder engagement

The most effective supply chain leaders align their goals with key stakeholders, encouraging collaboration to achieve the best outcomes and minimise costs. It’s also essential for those involved in healthcare supply chain management to align their business values (in areas including ESG, growth or customer service) with the supply outcomes (such as fulfilment and introduction of new products) to ensure success.

Undertaking risk and resiliency planning

While the pandemic put healthcare supply chains into reaction mode, supply chain managers are now considering longer-term strategies. They are prioritising building resiliency into their supply chains over cost savings by investing in systems to mitigate risk. These might include programs to plan for and respond to disruptions in the supply chain or building monitoring tools to track critical supplies.

Increasing visibility

The more visibility a health supply chain manager has, the easier it is to build resilience. Clear visibility using a system for tracking supplies, for example, helps highlight potential blockages and allows an organisation to get a more accurate picture of clinical and non-clinical supplies. Forming close relationships with both local and global suppliers and distributors also helps increase visibility and accountability.

Developing protocols for internal teams

Throughout the healthcare supply chain, it’s important for leaders to develop tools and enhance capabilities in their teams to increase crisis preparedness. A clear framework for managing supply chain challenges allows teams to more efficiently manage any blockages.

How Octet can help streamline healthcare cash flow

“For practitioners, if equipment breaks down and they can’t use it, that’s downtime in the practice,” Tim says. “The longer it takes to replace it, the greater the impact on the practice’s ability to treat patients and its revenue. It’s therefore vital that a supplier has access to extra stock at short notice. The large, multinational suppliers have the ability to bring stock onshore. But SME suppliers need more support.”

That’s why a reliable finance partner is a must for healthcare businesses. Working capital solutions can mitigate vulnerabilities and unlock opportunities in the global health supply chain.

“With Octet, you can increase your purchasing power and use that to negotiate early settlement discounts. You’ll be able to hold or order stock without needing your customers to pay upfront. We also give you the ability to offer your customers longer terms or repayment plans to make yourself more competitive.”

There are many options to strengthen your healthcare supply chain with Octet:

Enjoy up to 60 days interest-free and 120-day repayment terms with our Trade Finance facility. This convenient line of credit allows you to pay local and international suppliers securely and efficiently.
Access unpaid business invoices for a fast and efficient cash flow injection. We can help you convert up to 85% of outstanding invoices with our Debtor Finance facility — all without the need for personal asset security.
Streamline and track every stage of your supply chain process with our innovative Supply Chain Accelerate. This fast and flexible solution pays 100% of your supplier invoices instantly while you have up to 90 days to repay. That way your suppliers get paid while you enjoy an extension on your terms.

Strengthen your healthcare supply chain with Octet

Understanding your healthcare supply chain and applying strategies to strengthen and safeguard your network is critical for business success. You need a working capital and payments acceleration partner who can support sustainable business growth. Contact our team of healthcare finance specialists to find out what Octet can do to help power your healthcare business’s growth today.

Supply chain issues: trends and predictions for 2024 and beyond

Posted on October 24, 2023May 20, 2024 by Duncan Khoury

There’s no doubt global supply chains continue to face a multitude of challenges that demand innovative solutions. As we head into 2024, continuing disruptions caused by the COVID-19 pandemic, ongoing global tensions, inflationary pressures, supply uncertainty and environmental concerns are all forcing companies to re-evaluate their traditional supply chain models.

So, what are the future supply chain issues facing Australian businesses and their global trading partners? We explore the complex challenges confronting supply chains into 2024 and beyond, and touch on strategies to help organisations adapt and thrive.

6 global supply chain issues and trends in 2024

Many global issues have highlighted the vulnerabilities in supply chains over the past few years, says Octet’s Supply Chain Finance Manager, Joe Donnachie. So, what are the major supply chain challenges and trends as we move into 2024 and beyond? Here are our top six.

1. More circular supply chains

Manufacturers continue to move towards a circular supply chain model as we enter 2024. Gartner reports that in 2023, 20% of tech hardware vendors’ products were associated with circular initiatives. By 2030, that figure will increase to 80%. As businesses in various industries look to re-use and re-manufacture end-of-life products, vendors in the tech hardware industry will be particularly aware of mitigating the environmental impact of their products.

Every business has a different focus on creating a more sustainable supply chain. For some, it’s about making packaging more sustainable. Others will concentrate on the product and incorporate recycled materials into their manufacturing processes. While some businesses will repair, refurbish and recycle their goods to increase product lifetimes.

“Consumer demands have definitely changed,” says Joe. “While inflationary pressures mean most people have less cash to spend on disposable goods, there’s a lot more focus on where the goods come from and the sustainability of those end products.”

2. Ongoing skills shortages

Those in the distribution industry continue to experience talent shortages, affecting production and service delivery. Companies are having to employ technology to help workers access systems easily and securely, while automating routine tasks and creating a positive work culture to attract and retain employees.

As the skills shortage and increasing labour costs continue to affect output, margins are being reduced, and businesses will have to look to AI, digital transactions, robotics and automation to remain competitive.

Joe says an increase in automation and digital documentation requires workers along the supply chain to adapt and gain new skills to incorporate this new technology into their work routines.

3. Increased consumer pressures

While traditional supply chains were a relationship between a business and its suppliers, a recent, more active addition has complicated that relationship — the consumer. According to Forbes, thanks to digitisation, consumers are now more aware of how products are made, where they come from, and other options available to them. This new relationship adds further complexity to supply chain management, and that will only increase in the future.

“There’s a lot more pressure from the consumer,” says Joe. “They’re substantially more conscious of the source of products. I see it in items such as clothing, food and alcohol. For example, there’s now a big shift towards low- or non-alcoholic drinks, and that industry has just boomed over the last three years. All driven by consumer demand and using social media and other tech-driven forums to amplify word of mouth.”

4. Rising inflation and economic instability

The Reserve Bank’s efforts to ease inflation through numerous steady rate hikes have led to economic uncertainty for consumers and a reduction in spending, which will no doubt continue into 2024. Adapting to a changing economy is vital for businesses to stay competitive in the years ahead. All businesses will need to be flexible and prepared to change their services, products and marketing plans to meet consumer demand.

It’s a pressure felt around the globe as other central banks’ efforts to tame inflation continue to dampen economic growth. The IMF reports the factors that could potentially hinder economic growth in the future include the risk of inflation staying high or rising further, the chance of further extreme weather events, China’s economic recovery slowing and an escalation in the Ukraine war, which could lead to even more restrictive economic policies.

The global financial pressures causing supply chain disruptions will not likely ease in 2024, particularly when we consider the current Israel/Palestine conflict in the Middle East.

5. Ongoing supplies shortages

From minerals to medicine, building supplies and grocery staples — supplies of materials around the world failed to meet consumer demand during COVID-19 and in the years that followed.

While the semiconductor supply to the automotive industry is finally improving, chip shortages could still affect manufacturers in 2024 as demand outstrips supply.

Closer to home, medicine shortages are still affecting Australians. The TGA reports that hundreds of medications are in ‘short supply’, with the nation’s pharmacists forced to offer substitutes to their customers.

6. Easing of shipping pressures

Shipping delays, bottlenecks, container shortages and Russia’s war on Ukraine have heavily affected shipping in the past few years, but the outlook is more positive for 2024. International Cargo Express predicts the industry will return to normal in 2024 with new capacity coming into the market, while carriers will balance their supply with new procedures, and ships will become more reliable. There will also be a steadying of freight rates.

DHL predicts a steadying of rates later in 2024, and reports that as new containers enter the market, the industry will enjoy more capacity and an improvement in the reliability of schedules.

Allianz reports the world’s container fleet grew by 6.3% in 2023 and will continue to grow by 8.1% in 2024. Considering congestion at ports is also easing, supply will likely rise.

How to overcome supply chain challenges

As we head into 2024, geopolitical uncertainty, economic pressures and ESG demands are forcing a rethink of conventional supply chain models, which will need to better balance sustainability, speed, responsiveness and cost. So what can businesses do to alleviate supply chain issues, protect their supplier relationships and ensure longevity?

Diversification

Relying on limited suppliers left businesses vulnerable in the years during and after COVID-19. “A solution is to diversify that risk to multiple supply chain sources, and that’s what has really happened over the last few years,” Joe says.

Diversifying a business’ supply base is, in theory, a great idea, but Joe warns it’s not as simple as it sounds. “It comes back to how dependent businesses are on a particular product or component coming into the country and whether or not they have the ability to, say, start setting up a workforce in another country, which obviously has its own tax implications and regulations. What is the competition in that area as well? These factors make it very challenging, but necessary, to diversify your supply chain.”

Analytics

All businesses should be looking to implement a digital supply chain that takes advantage of analytics and uses consumer data to inform decision-making. By aligning supply with real-time demand, businesses can ensure more products are delivered on time while offering exceptional customer service and minimising costs, such as warehousing and storage.

AI and Robotics

Forecasting has always played a role in supply chain management, as it enables businesses to plan for increases in demand, supply shortages and unforeseen events. Now, AI is allowing predictions to be made from massive amounts of data faster and more accurately than ever before. The pandemic showed just how important it is to plan for unexpected circumstances. AI has the potential to become an essential risk management tool.

As the world’s businesses continue to grapple with worker shortages and inflation, they are turning to automation and robotics. Prices of robotics are dropping, and when coupled with AI, can become a powerful and viable business tool.

Other technologies

New technologies are being embraced along the supply chain. 3D printing is allowing businesses to print parts or whole products and reduce reliance on overseas suppliers or vulnerable supply chains. Blockchain solutions are also providing increased accountability and responsiveness along complicated networks. Blockchain technology could centralise and streamline processes in an industry such as shipping, which requires considerable documentation and complex procedures.

Maximise your supply chain performance with Octet

Octet’s supply chain finance solutions power your business to thrive, no matter what supply chain issues you’re facing. With our secure supply chain platform, you can use your credit or debit cards to ride fluctuations in commodity prices and exchange rates and make cross-border payments easily.

With our Debtor Finance facility, you can access up to 85% of your unpaid invoices to boost cash flow in your business and capitalise on opportunities. Need to increase your purchasing power? Our Trade Finance facility is a convenient line of credit that allows you to pay both local and global suppliers with up to 60 days interest-free and 120-day repayment terms. Contact our team of working capital specialists to discover how Octet can help accelerate your cash flow and improve supply chain dynamics today.

Agriculture finance: embrace opportunity and overcome uncertainty in your agribusiness

Posted on September 18, 2023May 20, 2024 by Duncan Khoury

With the breaking of the three-year east-coast drought in 2020, many agricultural regions shifted from poor to good conditions in a single season – and years of record-breaking production have followed.

However, the challenges and uncertainties for agribusinesses remain, and climate variability isn’t the only thing Australian primary producers, and the businesses that support them, need to manage. In this volatile and unpredictable environment, the right agricultural finance is vital for agribusinesses to manage the numerous challenges and thrive.

Here, we examine the key obstacles facing Australian agriculture and explore the agriculture finance options that can best support agribusinesses into the years ahead.

Agribusiness finance: the unique needs of Australian agribusinesses

Australian agricultural activity covers 427 million hectares of land, which equates to more than half of Australian land use. The sector accounts for 11.6% of goods and services exports, and the most recent data suggests it employs about 239,000 people nationally.

It’s an extraordinarily diverse industry that plays an important role in the broader Australian economy – and those operating in the sector face a unique set of challenges.

Agriculture is an inherently seasonal industry. It’s also vulnerable to risks ranging from the weather to supply chain disruptions and natural disasters. There can be high upfront and ongoing costs for insurance and maintenance, as well as long investment cycles.

We spoke with Octet’s Supply Chain Finance Manager, Joe Donnachie, to gain a deeper understanding of the key agriculture industry challenges.

Joe describes the challenges as “incredibly complex and multifaceted. Australia has recently gone from fires to floods and back again. We’ve had population change, volatile food prices and record price peaks. Then you’ve also got shifting dietary demands, which plays directly into the agri space.”

Something that has also significantly impacted agribusinesses in recent times is staffing issues. “Australia’s closed borders during COVID meant that the regular stream of backpackers couldn’t emigrate, and particularly in the Northern Territory and Far North Queensland, they simply didn’t have enough workers to properly staff farming operations.”

In addition, farm loan interest rates in Australia have obviously been rising, and inflationary pressures and tariffs have been wreaking havoc.

“In 2020, China imposed tariffs on Australian barley and a range of other agricultural commodities,” Joe says. “That alone wiped out around $1.2 billion worth of trade a year. In August 2023, the barley tariff was lifted. However, wine, seafood and red meat are all still subject to those restrictions.”

An intelligent supply chain finance partner can add some certainty to the equation in these highly variable and volatile conditions. “It can give a degree of certainty for an agribusiness when it comes to managing cash flow. A tailored working capital facility can assist with the uncertainty and ensure there is sufficient funding to tackle cash flow issues and take advantage of growth opportunities when they arise,” Joe explains.

Agriculture loans: the limitations of traditional finance

Banks were traditionally the first consideration for agribusiness lending, with an overdraft providing a general line of credit.

Traditional bank lending can come with several limitations, however, including:

Speed: Banks often have slow loan approval processes, meaning you could miss out on time-sensitive business opportunities due to delayed funding.
Restrictions: Traditional bank loans can come with restrictive covenants and fixed limits on funding. These limitations might not align with the dynamic nature of your business, especially in a rapidly changing sector like agribusiness.
Security: Banks typically require specific forms of collateral, which might not fit well with the unique structure of your business. This can be particularly relevant for agribusinesses with complex ownership arrangements.
Technology: Many traditional banks lack user-friendly and streamlined digital platforms for financial interactions. In contrast, non-bank lenders often provide innovative technology solutions that better suit a business’ supply chain needs.

Joe also explains that the challenges most agribusinesses face “make consistent profits year in year out unlikely, and annual profits difficult to forecast”. This can then act as a barrier when applying for traditional bank finance.

Better finance solutions for agribusinesses

These days, innovative finance products and non-bank lenders are available to help agribusinesses both survive and thrive. Octet provides a range of working capital solutions to power Australian agribusinesses, including:

Trade Finance: This solution is a great way to bolster your business’ purchasing power, with a revolving line of credit, allowing up to 60 days interest free and 120-day repayment terms.
Debtor Finance: This facility enables you to access unpaid business invoices as an immediate cash injection quickly and efficiently. Octet can help you convert up to 85% of invoices to immediately boost cash flow.
OctetPay: This allows you to use your credit or debit cards to pay any supplier invoice to an extensive list of countries and currencies. Access market-leading FX rates, Octet’s supply chain technology, plus standard credit card rewards points with this intelligent solution.

When exploring an agriculture finance solution, Joe recommends simply choosing a product that best suits your business. “Don’t be pigeonholed into one product if it’s not suitable – especially where a lender has only one type of facility available. Understand the working capital requirements and the total cost of the facility. Make sure that when it boils down to marginal cash flow, that the facility works for you, and is commercially viable.”

Case study: Trade Finance solutions for a grain trader

One of Octet’s loyal clients, a prominent grain trader, had the opportunity to procure substantially more stock. The business had existing bank loans, however, to obtain another line of credit to purchase the additional grain, their bank would take about six months to provide an answer. Given the cyclical nature of the business, that just didn’t work.

So they discovered Octet, who, in a matter of weeks, provided a $2 million Trade Finance line of credit that didn’t impede upon the client’s existing bank facility. The business used the funds to efficiently pay their grain suppliers and local transport companies that moved the grain.

Weather the storms and make hay with Octet while the sun shines

Your agribusiness needs a strong and flexible finance partner to grow and flourish. Explore Octet’s range of working capital solutions to find the right product for your fast-growing operation. Contact our team of supply chain finance specialists today.

International business payments: tailored solutions for your business

Posted on September 13, 2023May 20, 2024 by Duncan Khoury

Australian business owners, leaders and entrepreneurs who transact internationally continue to face challenges due to the limitations associated with traditional finance facilities and credit card usage. However, OctetPay is redefining the landscape in an effort to make international business payments more efficient – so established and growing Australian businesses can thrive in the expanding global marketplace.

We spoke to Octet’s Head of Marketing, Duncan Khoury, about the future of business foreign exchange and payments.

A fresh option: seamless international money transfers for businesses

There are approximately 2.4 million businesses in Australia, and many of those trade and transact internationally. Add to that the fact that our nation’s local enterprises have a total foreign business currency exposure of $2.39 billion, and it’s clear business foreign exchange services are needed now more than ever before.

With US giant Amex recently announcing the decommissioning of its FX payments product outside of the United States, many businesses have been forced to seek new and reliable ways to seamlessly pay both their international and domestic suppliers.

“There are potentially hundreds of thousands of Australian businesses being impacted here,” Duncan says of the Amex move. This is where Octet has emerged as a supplier payments game-changer. The OctetPay service provides businesses with a transparent supply chain platform for swift and secure cross-border payments.

FX for business: OctetPay is the solution

OctetPay is breaking new ground in the international business payment sector by streamlining transactions and overcoming cross-border payment issues. Using an intelligent supply chain platform, OctetPay enables users to transact with confidence.

Duncan says there are two broad types of business payment requirements: domestic and international, and OctetPay can manage both.

“A lot of the providers out there are centred more around domestic payments. OctetPay has two key points of differentiation. One is that it is more geared towards being a fast and efficient international payment product, and two, is the nature of the supply chain platform itself. Once you have onboarded your suppliers onto the platform, and you start transacting with them, it’s seamless, secure and fast.”

So, what are the other benefits of choosing OctetPay?

Registration is easy: To register with OctetPay, all you need is a company ABN, bank account confirmation and your current Australian driver licence.
Straightforward and streamlined: Octet’s platform is compatible with major card brands, including Visa, MasterCard and Amex, so that you can make payments using your chosen credit and bank debit cards. As an added bonus, you can still earn rewards points or cashback rewards whilst paying regular supplier invoices.
Ideal FX for business: Octet is able to pay suppliers in 68 countries, using up to 15 currencies including USD, EUR, GBP, JPY and NZD. Your card information is at the ready, regardless of the time of day. You choose the funding split and currency pair, and in one simple click, lock in your ideal foreign exchange rate. Who doesn’t like price predictability?
Security: OctetPay integrates seamlessly with our supply chain platform for added trading partner payment security.

Octet makes business easier

To create a streamlined and user-friendly experience, Octet’s other working capital solutions can work cohesively with OctetPay in order to help your business thrive in a competitive market.

Octet’s debtor finance solution is an efficient tool in enabling you to access unpaid business invoices as an immediate cash injection. In fact, we can help you convert up to 85% of invoices to immediately boost cash flow.

Also worth consideration is our trade finance facility. It’s a great way to bolster your business’ purchasing power, with a revolving line of credit, allowing up to 60 days interest free and 120-day repayment terms.

Power your growing business

Business money transfers and supplier payments have never been so easy. OctetPay gives you the power to pay, no matter where in the world your suppliers are located. Speak to our team of working capital and payments experts, or register online today.

Non-bank lenders: the future of business funding is here now

Posted on June 5, 2023May 20, 2024 by Duncan Khoury

Today’s businesses need flexible and fast funding options that support growth and allow them to take advantage of opportunities. Unfortunately, these are solutions that traditional lenders — like banks — can’t always provide.

Non-bank lending options are becoming an increasingly attractive option for Australian businesses due to their flexibility, visibility and speed. Discover what’s possible outside traditional banking and why businesses are looking towards intelligent finance partners like Octet.

The lowdown on non-bank lenders

There was once a time when banks were the only financial institution businesses considered for lending. And the most common solution was a bank overdraft to give them a line of credit. Although effective in some instances, it was a slow process and typically secured against the business or the director’s personal property.

Today, some non-bank lenders in Australia offer a trade finance facility as a holistic, flexible alternative. The benefits of this include:

the ability to have an unsecured facility, whilst setting your own supplier trading terms with up to 60 days interest free and 120-day repayment terms
the buyer and supplier both having visibility of all transactions
the fact that it acts as an all-encompassing supply chain procurement solution

Most importantly, though, businesses don’t have to realign their supply chain strategy to fit with the finance offering, as non-bank lenders offer products that complement and help to grow existing strategies.

Octet’s Supply Chain Finance Manager, Joe Donnachie, explains how trade finance solutions for businesses are growing in popularity.

“Trade finance acts as a perfect supplementary solution,” he says. “It can be when the bank’s funding is restricted, or when there are seasonal purchases, or even when the business is growing at a rate where having additional working capital is critical to allow that growth.”

Are you seeking a more tailored business finance solution? You’re not alone.

Australian businesses turning away from banks

Leading research group RFI Global partnered with Octet to survey Australian businesses about their financial plans. The results revealed an increase in businesses searching for financing solutions outside traditional banks.

The Australian businesses surveyed stated their intentions to use more non-bank lending options in the future, including trade finance, export financing, import financing, invoice factoring and invoice discounting.

Octet’s Co-CEO, Brett Isenberg, explains. “The research shows clearly that firms with higher revenue and those in primary, secondary and logistics industries will be demanding more tailored working capital solutions from non-bank lenders. This is to help navigate the current and upcoming economic turbulence.”

Businesses of all sizes also reported less reliance on traditional business credit cards. Likewise, those with a turnover of $140 million+ were 45 per cent more likely to use a business operating account or trade finance product to fulfil transactional funding needs.

The limitations of bank lending

Why are more businesses turning away from banks and looking towards non-bank commercial lenders? Joe offers several reasons.

Speed to market. Decisions must be made quickly and confidently to accelerate growth and keep up with the competition. “Banks take longer to get their ducks in a row,” he says. “Businesses can miss out on opportunities waiting for funding to become available.”
Restrictions. “With quite limiting covenants at times, there’s a whole raft of restrictions in place when banks are lending to a business,” says Joe. Likewise, there is often a fixed limit on funding available from banks. “Whether funding is restricted from breached covenants or the bank’s risk appetite changing, the client is usually the last to find out, and they suffer as a result.”
Security. Banks offering secured loans don’t always consider the unique structure of each business. “Traditionally, a bank might want either a registered GSA over the business itself or a director’s asset as security,” Joe explains. However, in cases of unequal shareholding, this can cause issues in the company.
Platforms and technology. Today’s businesses need innovative digital solutions for their finances. “Banks often have cumbersome platforms that aren’t always user-friendly, instead of streamlined procurement technology designed specifically for business supply chains, including interactions between their local and global suppliers.”

Banks no longer working for your business? Think outside the box

Are you considering embracing more innovative finance solutions for your business? Joe advises companies making the switch to a non-bank lender to be prepared before they do.

“Speedier funding and more efficient solutions are all possible,” he says. “But businesses need to have the relevant financial information available, provide reconciled accounts and have various internal processes locked down.”

He also suggests that businesses establish whether a non-bank lender fits them well. “Ask for a platform demonstration to see if it works for your business. Bring the accounts team into the fold. As the ones utilising the facility day to day, it also needs to be a good fit for them.”

Octet offers a range of finance solutions for businesses wanting to move away from more traditional commercial lenders. Our trade finance facility provides flexible and fast credit for businesses of all sizes, whilst some entities might require a debtor finance solution to unlock the potential in their accounts receivable. Using Octet’s Digital Wallet, you can also leverage existing funding sources to pay local and global suppliers through a single, secure online platform.

Non-bank lenders: the future of business funding

Octet partners with fast-growing Australian businesses to tailor finance solutions that work for them. Ready to grow on your own terms? Speak to us about the options — including trade and debtor finance — that make sustainable growth possible.

Beyond business credit cards: the future of supply chain finance solutions and digital wallets

Posted on May 25, 2023May 20, 2024 by Duncan Khoury

The credit card has long been a financial staple for many businesses. Whether used to stock up on stationery and other supplies, pay for ad hoc services or entertain clients, it’s a reliable and fast source of funds.

For all the advantages business credit cards offer, they also have limitations. And as many Australian businesses now look towards other forms of credit — like trade finance products and more holistic digital wallets — these limitations become even more apparent.

We spoke to Octet’s Head of Marketing, Duncan Khoury, about the future of the business credit card and why digital wallets and tailored working capital solutions are poised to become the norm for today’s companies.

The current landscape of business credit cards

As one of the earliest personal finance solutions, credit cards have a long history of providing fast and straightforward access to money. But it wasn’t until the 1970s that businesses started seeing their value too. After realising the credit card’s potential, the corporate credit card for company expenses was born.

“The business credit card was commonly used for menial things, like weekly office shopping or buying stationery,” Duncan explains. “Today, small-to medium-sized businesses can use them for more meaningful expenses, like monthly advertising on channels such as Google and Meta.”

While they remain an intelligent solution for business purchasing of this nature, business credit cards have limitations. Let’s explore some pros and cons.

The pros:

cost-effective, if paying the account on time
allow purchases to be traceable
maintain control over business equity
unlike other lines of credit, there is generally no security needed
earn rewards points for your business through purchases

The cons:

potentially damage personal/cardholder credit rating
higher interest rates than other forms of credit
possible merging of business with personal expenses in smaller businesses
insufficient funding lines for larger purchases

Today’s complex and agile businesses need more than simple credit cards. They require simplified, consolidated access to finance that allows them to make substantial purchases along their supply chain. So, what’s the solution?

Seeking a better solution

If your business is considering moving away from physical credit cards in favour of more holistic working capital solutions, then you’re not alone.

Working with Octet, leading research group RFI found Australian businesses today were less likely to use credit cards than other forms of credit. Companies with a turnover of between $10 million and $700 million were more likely to use a business operating account or trade finance product instead.

“The gap was also particularly substantial where businesses had some revenue from online channels and digital sales,” says Duncan.

Digital wallets have become an increasingly popular finance product for businesses, with an ability to fill the gaps that credit cards can’t. But what do they do exactly? Duncan explains.

“A digital wallet is a financial transaction application that runs on any device. It connects both your own and external payment sources such as supply chain finance facilities, allowing you to make transactions and track payment histories — all in one digital location.”

It’s no surprise that digital wallets are the answer for many businesses seeking efficient and less restricted finance solutions.

The Octet digital wallet difference

Octet’s digital wallet is a default offering within our supply chain management platform. As such, all trade finance and receivables finance customers can access it.

“Octet working capital solutions are built around the supply chain, including our digital wallet,” says Duncan. “The key features and benefits have been tailored for the cyclical nature of business conditions, and can be tailored to your specific business and supply chain requirements.”

The Octet digital wallet gives you oversight of all cash coming in and out of your connected business accounts, leveraging your finance solutions with a simple and consolidated approach.

“Businesses can pay with existing funding sources, including credit and debit cards. It also allows you to bring your own FX contracts and plug them straight in, so you can continue using your current exchange rate with certainty.”

Importantly, Octet provides a secure online environment for its customers. With certified information systems and verifications at every step, businesses can feel safe using Octet’s platform. We verify all trade partners with processes including anti-money laundering, counter-terrorism financing and know your customer, so there’s less risk for all parties.

Octet’s digital wallet — and other working capital solutions — give businesses a modern, simplified and bespoke approach to their finances.

Simplify your finances with Octet

A business can only operate as effectively as its finance solutions and cash flow position allow. Speak to Octet about the difference a digital wallet, including tailored supply chain finance can make for your business.

Working capital solutions for successful business growth

Posted on March 23, 2023May 20, 2024 by Duncan Khoury

Your business is strong. Demand is growing. You’re ready to take your company into its next phase. But how do you make the transition successfully?

Moving through various phases of business growth can be a rewarding – and challenging – time. When risks and opportunities are abundant, you need the right finance partner to ensure success. Our key recommendation? Look for flexible finance solutions to ensure your business can quickly capitalise on new opportunities.

What is business growth?

Ask any business owner about their goals, and the answer will inevitably relate to growth. Whether it’s a vertical expansion (like venturing into related products and services) or horizontal diversification (such as bringing a traditional brick-and-mortar retailer into the ecommerce space), there are many ways a company can grow.

But these periods of change come with uncertainty, particularly around financials.

Brett Isenberg, Co-CEO of Octet, believes the most critical time for a business to be on top of its finances is during a growth phase.

“It’s critical for all key staff and departments, not just the finance team, to understand and value the numbers,” he says. “This is especially true for high-growth businesses where there are both significant risks of failure and significant opportunities.”

How to promote business growth

So, what do you need to ensure your business growth phase is successful? While every business is different, successful growth usually requires an appropriate and sustainable funding or working capital base, especially during the early stages. But obtaining funding is also one of the biggest challenges.

For businesses planning a growth phase, it’s important to look for flexible, secure and sustainable funding options.

Smooth business growth is possible with tailor-made working capital solutions such as debtor finance and trade finance.

When researching the best finance solution for your growing business, Brett recommends looking for products that are “designed to cater for common fluctuations in business supply chains”.

“For example, our debtor finance facility grows and flexes with a business’s sales volume and enables further growth, giving you early access to a large percentage of your accounts receivables,” he says.

Octet’s recent, successful partnerships with leading Australian businesses, including Builders Steel Direct and Vinomofo, demonstrate the possibilities. Using our supply chain finance solutions, these companies were able to grow to meet demands and seize critical opportunities when they arose.

“Many of our clients and members are rapidly growing businesses that have only been operating for less than ten years,” Brett says. “These are businesses that have demonstrated remarkable growth through their product, marketing and overall business strategy.”

Why fast-growing businesses partner with Octet

Traditional finance solutions (provided by banks) and government initiatives like the Australian Business Growth Fund may appeal to companies entering a growth phase, but these avenues often come with burdensome conditions and lengthy approval processes.

In contrast, Octet delivers flexible products and specialised support for high growth periods. Partnering with us offers advantages that business growth funds and other finance providers rarely deliver, including:

Tailored supply chain finance solutions. “Our unique supply chain finance management platform and technology gives better financial visibility, supplier transparency, and added security,” Brett says. These factors are especially crucial during higher business growth phases and for international transactions.
Flexible lines of credit and criteria. “Octet determines funding limits by better understanding the business’s balance sheet and financial strength – including any growth plans,” Brett says. We offer flexible lines of credit that grow with your business, and can combine Trade and Debtor Finance funding limits to meet increased customer demand.
Streamlined processes and dedicated service. We give businesses the tools and confidence to grow while providing dedicated service and support. As the key elements of your supply chain network connect through Octet’s platform, processes become streamlined and more efficient. This technology is then backed by our experienced team of supply chain finance specialists.

Brett urges business owners to explore all finance options – even the unfamiliar ones – before entering a planned growth stage.

“The reluctance to pursue non-bank debt financing is sometimes borne of a fear of the unknown and the multitude of finance options available,” he says. “Speak with your industry peers, a finance consultant or your business’s accountant to look at the pros and cons of every solution.”

Giving you the power to grow

Octet’s working capital solutions can help your business to accelerate growth and seize opportunities as they arise. Contact our team today for a tailored working capital approach to achieving your business goals.

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.

Future focus: 10 key trends in Australia’s food and beverage industry

Posted on January 25, 2023May 20, 2024 by Duncan Khoury

Over the past few years, the food and beverage industry in Australia has faced a series of events that seem to be growing in intensity. The global pandemic created supply chain challenges and skills shortages, while political tensions and social unrest continue to send shockwaves across global markets. The growing urgency of the climate crisis is also putting pressure on consumers and manufacturers to act now to create a sustainable future for their businesses and the world.

Although it’s been hit hard, the food and beverage industry has remained resilient. According to an October 2022 report, the global industry grew by 8.7% from 2021 to 2022, and this growth is set to continue. Whilst the Australian Food and Grocery Council reports that the local industry has the potential to become a $250 billion powerhouse by 2030 — double its current size.

However, for your business to claim its share of the pie, you need to clearly understand the specific challenges and opportunities that exist in the industry today.

Let’s explore the most significant trends in the food and beverage industry and uncover how you can overcome these challenges to harness current and future opportunities.

10 trends that will shape the future of the food and beverage industry in 2023 and beyond

Supply chain challenges to continue

Supply chain disruptions will continue to be one of the most significant challenges in the food and beverage industry in 2023. Although the days of domestic lockdowns are gone, disruptions to the global supply chain remain, with Toll Group Managing Director, Thomas Knudsen revealing that supply chain issues are likely to persist in 2023.

The Russia-Ukraine conflict has greatly impacted supply chains, with economic sanctions, undersupply of products and a surge in commodity prices affecting the food and beverage industry worldwide.

Congestion and backlogs in ports around the world are also causing delays in supplying key ingredients. This has forced many food and beverage organisations to develop workarounds, such as formulating alternative recipes to continue production without key ingredients. They are also adopting circular supply chain models and embracing technological innovations, such as AI to streamline processes and gain more control of their supply chain.

Food inflation forecast to increase

According to the Australian Trade and Investment Commission, global food prices have risen by 31.1% and are at their highest level since 2011.

Fruit and vegetables have experienced the biggest price increase, with data from Deakin University suggesting that fresh produce has risen 6.7% in just over 12 months. This is being driven by a number of local and global factors, including flooding, supply chain issues and rising fuel and transportation costs.

This inflation will have varying impacts across the food and beverage industry. While it’s good news for large supermarket players, others in the industry may well feel the price squeeze.

And given the integral role of food and beverage products in the hospitality industry, rising food inflation is a critical factor to keep an eye on. For example, restaurants typically increase their menu prices when ingredient costs rise, but if wage inflation doesn’t keep pace, price increases may dampen consumer demand.

Staff shortages set to linger

Staff shortages are another pressing challenge in the food and beverage industry today. According to the latest ABS Business Conditions and Sentiments report, accommodation and food services businesses were the most likely to report difficulty — 51% of businesses stated they were struggling to find suitable staff to fill jobs.

Low unemployment rates and a continued shortage of international workers has meant a critical undersupply of staff, forcing some businesses to reduce hours due to a lack of workers.

What was an emerging issue in the hospitality industry back in 2020, is still one of the current trends in the food service industry in 2023. And, as per warnings from KPMG, it may remain a concern for the next three to five years.

Conscious consumers to drive growth

Rising consumer concerns about environmental issues and sustainability are also forecast to drive food and beverage industry growth.

Deloitte’s 2022 Sustainability & Consumer Behaviour survey found that consumers are placing sustainability at the centre of their shopping decisions.

Consumers are making efforts to choose seasonal and local produce and reduce carbon emissions, making small and independent businesses more attractive options.

Packaging is another area that’s coming under increased scrutiny, and the food and beverage industry is taking action on this trend. A recent McKinsey global survey of packaging purchasers across industries reported that 75% of organisations have already made clear sustainable-packaging commitments.

Uptake of digitalisation and automation to increase

Creating efficiencies and cost-cutting while maintaining quality is one of the many challenges in food industry finance. In 2023, organisations will be looking to digital and automation technologies to solve some of these challenges, from digital expiration date labels, sensors that gather data on machine performance and analytics that assess shelf life and product traceability.

Technology in the food and beverage industry has come a long way. For example, e-commerce in the food and beverage industry has proliferated to match consumer preferences for online shopping. But the Australian Food and Grocery Council has warned that significant tech development investment in local food manufacturing is required or the industry risks losing ground to imports.

Growth of meal prep kits and food boxes that offer consumers convenience

Meal prep kits are one of the big success stories in the food and beverage industry in recent years, with pandemic lockdowns kickstarting their popularity.

In 2023, amid rising food costs, an increased focus on nutrition and more awareness of the value of reducing waste, meal kits are set to become one of the biggest growth areas in the food and beverage industry.

According to Future Market Insights, the meal kit delivery services market is expected to grow 15% over the next decade to represent a US$59.2 billion sector.

Healthier consumer food preferences to trend upwards

Health concerns are on the rise and people are becoming increasingly focused on what they eat. In a recent Deloitte survey, 93% of consumers said they wanted to eat healthily at least some of the time.

And with consumers becoming more aware of the link between food and overall health, they’re changing their shopping habits accordingly. This means a shift towards fresher produce, less meat and reduced sugar.

Companies can take advantage of this trend, by offering healthier products or adapting existing products for certain diets (such as gluten-free or vegetarian).

Demand for non-alcoholic drinks to keep rising

In line with an increased consumer focus on health, non-alcoholic drink sales have skyrocketed in recent years.

According to the International Wines and Spirits Record, the no- and low-alcohol beverages market has reached US$10 billion and is set to grow by 8% to 2025. This is compared to only 0.7% growth of regular alcohol volume during the same period.

Increased awareness of the value of a balanced lifestyle has fuelled this growth, with millennials and higher-income earners the biggest spenders in this category.

Demand for plant-based and alternative proteins to grow

Plant-based ‘meat’ is set to become one of the biggest growth areas in the food industry in 2023. Already accounting for $150 million in consumer spending, it’s projected to contribute almost $3 billion in domestic sales by 2030.

According to Food Innovation Australia Limited (FIAL), this potential growth represents $5 billion in value-added opportunities and 6,000 new jobs in the sector over the next decade. There are countless opportunities for manufacturers that embrace alternative proteins such as seaweed, nuts and seeds and edible insects.

Payment delays and insolvencies to increase

Rising inflation, increased transport costs, supply chain issues and global uncertainty are putting financial pressure on many organisations in the food and beverage industry. These factors could lead to an increase in industry payment delays and insolvencies in 2023.

Insurance company Allianz predicts an acceleration in business insolvencies globally, and the food and beverage industry has been pinpointed by some as one of the sectors with the highest probability of payment default in 2022-2023.

How to harness opportunities to grow your food and beverage business

Some of these trends need to be overcome and others harnessed. Regardless, these are the tangible actions you can take to help grow and protect your food and beverage business.

Investing in digitalisation and automation technologies

For those in the food and beverage industry, technology is one of the most powerful ways to gain a competitive advantage. For example, automation and robotics can help improve productivity, particularly for food manufacturing businesses. Sensors and predictive analytics can improve competitiveness by reducing water and energy consumption, as well as minimising equipment downtime.

Meanwhile, artificial intelligence and virtual reality can also speed up the product development process within the food industry. E-commerce digital infrastructure allows businesses to better meet the growing consumer preference for online shopping. Online wine retailer Vinomofo is a successful e-commerce business example to take note of.

Adapting products to meet changing consumer preferences

Growth opportunities exist for food and beverage businesses to adapt or introduce non-alcoholic drinks or other products, focusing on health, sustainability and plant-based/alternative proteins, all while promoting convenience.

Sustainable packaging should also be considered. It’s a commitment that Mars Wrigley Australia has made. The creator of Snickers and Milky Way has a goal of transitioning its products to 100% recyclable paper-based packaging by 2025. To do so the company will not only redesign its packaging, but also support recycling infrastructure and educate consumers.

Undertaking robust business continuity planning

Global economic uncertainty is one of the most significant challenges facing the food and beverage industry today. To help prepare for future market uncertainty, Food Innovation Australia Limited (FIAL) suggests that food and beverage businesses rethink their business continuity planning, including cash and liquidity planning.

Unlock your business potential with Octet

At Octet, we can help you capitalise on these industry opportunities with our intelligent working capital solutions. Designed for the unique requirements of the food and beverage industry, our smart, fast and flexible finance solutions give you the power to leverage opportunities as they arise.

We’ll work with you to unlock your business potential by:

Strengthening your cash flow. Our Debtor Finance solution lets you access up to 85% of the funds from your unpaid invoices within 24 hours. That means you get cash when you need it most to help your business withstand the payment delays forecast to impact the industry in 2023. The result is increased cash flow, more liquidity and — ultimately — less risk for the entire supply chain. For beverage company Saintly, this facility allowed it to grow the brand while alleviating the pressure of cash flow fluctuations.
Helping you ride out pricing and exchange rate fluctuations. Our secure supply chain platform helps to manage the peaks and troughs of commodity-price and exchange-rate fluctuations. It allows you to make cross-border payments with your existing debit/credit cards, bank accounts and Octet finance solutions.
Giving you the flexibility to adapt. Meeting changing consumer preferences requires flexibility. Having cash flow available in line with your invoiced sales lets you evolve your product offerings or invest in food-and-beverage-industry-specific technology without going into uncharted financial territory. With our Trade Finance facility, you’ll have access to a convenient, revolving line of credit (with up to 60 days interest free and 120-day repayment terms) so you can seize opportunities as they arise.
Improving business efficiency. Our working capital solution, Supply Chain Accelerate, allows more sophisticated businesses to access an unsecured, off-balance sheet source of funding, settling 100% of your supplier invoices upfront, while you can repay 30, 60 or 90 days later.
Reinforcing your supply chain. By using Trade Finance as an intelligent procurement tool, you’re also able to take advantage of any available early payment discounts with both local and overseas suppliers. This might allow you to buy extra stock or take advantage of bulk purchases to attain discounts. In turn, this can help you to reduce the potential supply chain disruptions that are forecast to impact the industry in 2023.

Powering the food and beverage industry

Octet provides solutions for all of your supply chain business finance requirements in one central location. We can help you better manage your cash flow, grow your business and leverage both global and local opportunities.

Get in touch today to discover which options will best suit your business.

5 key challenges in the pharmaceutical industry in 2023

Posted on January 15, 2023May 20, 2024 by Duncan Khoury

The Australian pharmaceutical industry has certainly had its challenges in the past year. The ongoing effects of the global pandemic have continued to put pressure on the industry, while rising inflation, geopolitical instability and a shift in workforce behaviours have added to the already burdened sector.

Amid this growing list of challenges, pharmaceutical companies are looking for ways to build business resilience so they can continue to develop lifesaving solutions for patients both locally and around the world.

As we kickstart 2023, let’s take a look at the biggest challenges in the Australian pharmaceutical industry.

Challenge 1 — The skills shortage

The worldwide skills shortage is hitting businesses hard, with 31% of organisations in Australia struggling to find suitably skilled staff in 2022. In the pharmaceutical industry, there has been a surge in demand for STEM-related roles, but reports show the current talent pool is 14% less than demand.

Adding to this challenge is the shift in the way we work. The rise of remote working has caused a spike in employee expectations, with more people opting for organisations that offer flexible working arrangements, hybrid set-ups and remote opportunities.

Organisations are increasingly looking for ways to attract and retain skilled talent and are focusing on reskilling, upskilling and automation to solve one of the biggest challenges facing the pharmaceutical industry today.

Challenge 2 — Clinical trials playing catch up

For pharmaceutical companies running clinical trials for anything other than COVID-19 vaccines, the pandemic caused huge interruptions. And although the primary effects of the pandemic are receding, we’re still feeling the impact as we move into 2023.

Because new drug approvals depend on successful trials, this has meant the loss of a staggering amount of research, drug development and funding. As a result, both the industry and those who fund it have suffered financially, and many are still playing catch-up in their trial programs.

Companies in the pharmaceutical industry are now looking to technologies such as AI and virtual platforms to either restart or recreate trials with less face-to-face interaction. However, this new technology comes at a cost — significantly lowering or even erasing profit margins.

Challenge 3 — Supply chain disruptions

Although the pharmaceutical industry has historically been protected from supply chain disruptions because of high inventory levels, there have been widespread supply chain pressures across almost every sector, particularly over the past year.

ABS data from June 2022 shows that more than two in five businesses (41%) have faced supply chain disruptions, and the Australian pharmaceutical industry was no exception.

There continues to be a strong reliance on raw materials from abroad, with pharmaceutical companies relying heavily on imports from China while also looking to India for generic drug production.

According to the US Food and Drug Administration’s Center for Drug Evaluation and Research, China and India combined account for 31% of FDA-registered facilities around the globe. This heavily dependent supply chain continues to be one of the major challenges facing the pharmaceutical industry, with the drug shortages that peaked during the pandemic being more than likely to continue into 2023.

Many pharma companies are looking to supply chain innovations and circular supply chain models to tackle these challenges and build business resilience. Examples include establishing robust supply chain relationships and networks to better take advantage of market demand and moving to dual or multi-sourcing models backed by intelligent supply chain technology.

Challenge 4 — Cultural focus on prevention, rather than treatment

For humans in general, the cultural shift towards preventing rather than curing many diseases is great news. However, for the pharmaceutical industry, it means a serious drop in funding — both government and otherwise.

As new developments in ‘lifestyle cures’ such as elimination diets, improved sleeping conditions and increasing physical activity become commonplace, consumers are moving away from medication as the primary treatment for disease. With this trend comes lower medication turnover and more roadblocks to securing desperately needed funding.

Challenge 5 — Developing new cures for presently incurable diseases

Identifying cures for presently incurable diseases, such as cancer, Alzheimer’s and epilepsy, is a challenge that the pharmaceutical industry has always faced. Quick solutions are rare, and research and development is a long game.

Here in Australia, the Albanese Government is boosting stem cell research by offering $25 million in grants. This is part of a $150 million commitment over nine years, showing just how big a drive is needed in this area.

But developing new and innovative treatments requires continual and substantial investment. Without it, the goal of discovering cures that work well enough to earn strict regulatory approvals will be difficult to achieve.

Power your business growth with Octet

Although these challenges vary significantly in their origins, the solution to them is often to strengthen business cash flow. Exploring healthcare finance solutions could make a difference in addressing and overcoming all of these hurdles. Access to strong, diverse and reliable sources of cash flow can be a make or break for pharmaceutical companies.

Octet has a range of solutions to help your pharmaceutical business meet the current challenges and grow in 2023 and beyond. That way you can remain focused on serving your customers, not worrying about cash flow. These solutions include:

Our Trade Finance facility, a flexible line of credit that you can use to pay your suppliers earlier at home and around the world, with up to 60 days interest free and 120-day repayment terms
Debtor Finance, which allows you to convert up to 85% of your unpaid invoices into funding within 24 hours
Supply Chain Accelerate, an unsecured, off balance sheet source of funding, which settles 100% of your supplier invoices upfront, while you can repay 30, 60 or 90 days later

Our team of working capital specialists has helped business owners around the country overcome financial challenges, explore new avenues for success and achieve sustainable business growth. Talk to us today about which finance solution is right for your fast-growing pharmaceutical company.

Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgement. 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 judgement as at the date of publication and are subject to change without notice.

Analysis: The future of finance in the food and beverage industry

Posted on December 5, 2022May 20, 2024 by Duncan Khoury

The past few years have presented the Australian food and beverage industry with exceptional and unforeseeable challenges.

While demand for essential food and beverages will always exist, many businesses in the industry are experiencing significant challenges, primarily due to:

changing customer needs
supply chain disruptions
currency fluctuations
climate change
cost-of-living pressures
skills shortages

Now, more than ever, managing finances in the food industry is crucial to staying profitable and building a resilient business. Let’s take an in-depth look at the challenges facing the food and beverage industry and how businesses in the sector can best manage their risk.

The importance of Australia’s food and beverage industry

The food and beverage sector is Australia’s largest manufacturing industry, accounting for 32% of the country’s total manufacturing turnover. According to the Australian Food and Grocery Council’s 2021 State of the Industry report, the food and beverage, grocery and fresh produce sector is worth $132 billion and employs more than 270,800 people.

And perhaps most importantly, it’s the heart of regional Australia, with 40% of these employees living in regional and rural communities.

Together, these businesses supply a diverse range of products, including:

meat
grains
dairy
fruits
vegetables
seafood
confectionery
beverages (including wine)

And they cover all distribution channels, from retail to food service and food ingredients.

Food and beverage industry challenges

Strong financial performance in the food and beverage industry is vital to the Australian economy, now more than ever.

Some businesses are booming in the current climate, while others’ creativity and ability to adapt amid constant change has kept them going. Regardless of the status of each individual business or their finances, the food and beverage industry as a whole will face five unique challenges in 2023.

Challenge 1: Unpredictable customer patterns

Rising interest rates and cost-of-living pressures will continue to create unpredictable customer spending patterns in 2023. McKinsey found that price sensitivity has continued to grow during 2022, particularly among consumers from lower income brackets. This cohort is looking to save money on food and beverages where they can — even more so than during the pandemic.

This is driven by cost-of-living pressures due to rising inflation, which has reduced incomes and available cash for the weekly grocery shop. Switching to cheaper brands, favouring value retailers (such as Aldi) and seeking out better deals and promotions are ways that consumers might be looking to save money.

Challenge 2: Disrupted supply chains

Disrupted supply chains are currently one of the biggest challenges in the food and beverage industry. Business is also facing pressure to adopt circular supply-chain models. Internationally sourced ingredients and packaging supplies are taking longer than average to arrive, with the ongoing economic unrest causing global supply chain disruptions.

Transport costs have also skyrocketed, and this is putting increased financial pressure on the food industry — both for international and domestically sourced items. For example, Klaus Pamminger, chief operating officer at GrainCorp, said in a recent interview that transport costs have almost tripled in the last two years.

Finding quick cash flow solutions can be a challenge right now for many in the food and beverage industry. Some are considering different supply chain innovations, such as introducing more flexibility into their processes. An example of greater flexibility would be experimenting with different recipes in case key ingredients become unavailable.

Australian food and beverage manufacturers are also pivoting by diversifying their pool of suppliers, incorporating new technologies into their supply chain systems and training their supply chain workers to become more adaptable.

Challenge 3: Currency fluctuations

Even under normal circumstances, currency fluctuations can cause cash flow issues for businesses that either export or source materials internationally.

Currency fluctuations mean many businesses are currently paying more than they usually would for imported goods and services, while also earning less from any exports. Uncertainty has created downward pressure on the Australian Dollar, which dropped 11% against the USD in September 2022. This was its lowest level in two and a half years.

Without the cash flow to cover these often meaningful currency fluctuations, food and beverage businesses increase the risk of negatively impacting their bottom line during this extraordinary time.

Challenge 4: Climate change

Unpredictable weather patterns, such as long periods of drought, major floods and storms, can negatively impact supply chains and production processes. And with climate concerns intensifying into 2023, businesses in the food and beverage industry are challenged to find solutions to combat the associated risks.

Amid growing concerns about climate change and sustainability, consumers are paying closer attention to the personal impact their choices have on the environment. For example, Deloitte’s 2022 Sustainability Report found that 64% of consumers surveyed have reduced their consumption of single-use plastics. But in the coming years, consumers will have no choice. Australia’s states and territories, apart from Tasmania, have either banned or committed to banning single-use plastics — including cutlery, straws, plates, bowls and drink stirrers — by 2025.

In 2023, this increased scrutiny may shift consumer buying behaviour, not only around the products and brands they choose, but also in areas like packaging, sustainable waste reduction and ethically sourced products.

Challenge 5: Skills shortages

The food and beverage industry faces two key challenges in 2023 when it comes to resourcing: shortage of available talent and attrition of existing employees.

Data from the Australian Bureau of Statistics found that almost a third of employing businesses are having difficulty finding suitable staff. And in a 2022 report of the European grocery market, 39% of CEOs said hiring the right talent was a significant challenge over the last year.

Retaining talent is also a big challenge in the food and beverage industry, particularly in hospitality, as people are seeking better conditions. Many employers are considering incentives to attract and retain talent, such as sign-on bonuses, paid time-off and more flexible hours.

How can food and beverage businesses enjoy a cash flow boost in 2023?

Strong cash flow can help F&B businesses weather many of the current challenges. But how do you boost cash flow in such an unpredictable environment?

Our Trade Finance facility gives you access to a flexible line of credit to pay your suppliers earlier, whilst strengthening key business relationships. As it did for online wine retailer Vinomofo, which used the facility to take advantage of local growth opportunities during the pandemic.

Another way to boost cash flow is to leverage the funds tied up in your supply chain via our Debtor Finance solution.

It funds up to 85% of the value of your unpaid invoices within 24 hours. Your cash flow is boosted based on your invoiced sales so that you have the funds available to take action against the impacts of these industry challenges.

Improved cash flow can help you:

Leverage opportunities to grow or pivot. Meeting new market demands or changing your distribution network requires flexibility. Having cash flow available in line with your invoiced sales lets you jump on those opportunities without going into unchartered financial territory. With Debtor Finance, the more you sell, the more finance you’ll generally have available.
Reinforce your supply chain. Freeing up the money in your accounts receivables might allow you to buy extra stock or take advantage of bulk purchases to attain discounts and prevent supply chain disruptions.

Ride out exchange rate fluctuations. Access to increased working capital gives your business flexibility to better respond to currency fluctuations. And using our secure cross-border payments platform gives you upfront Australian Dollar visibility for international supplier payments, so you don’t get any nasty surprises.

Leverage the funds tied up in your supply chain

Trade and Debtor Finance are just two of the ways that Octet can help give your business a working-capital boost. Want to find out about these and other facilities we offer? Learn more about how we can power your food and beverage business today.

Working Capital Solutions

Trade Finance

Debtor Finance

Supply Chain Accelerate

OctetPay

Industries

Why Octet

Digital wallet

Global network

Cross-border payments

Supply chain management

Security

Rewards

Labor – Short-term relief and workforce reform to support a sustainable economic recovery

Coalition – Tax cuts and deregulation to boost growth and confidence

Australian Greens – Support for small businesses and local economies

Teal Independents – Focused on simplifying regulations

What should businesses take away from the election policy debate?

Business readiness checklist: 9 key considerations

1. Finances and cash flow

2. Business operations

3. Managing change and crises

4. People and culture

5. Partnerships with suppliers and stakeholders

6. Intellectual property

7. Cybersecurity

8. New technologies

9. Growth goals

A healthy business starts with the right finance

Begin your business health check with Octet

Growth challenges: why most businesses fail to grow

The sustainable way to grow

Leveraging business growth finance for expansion

How Octet can assist with financing business growth

A finance solution that grows with you

A close supplier-customer relationship is a win-win

The risk of a one-sided business relationship

Good relationships are worth the investment

How to build business relationships with suppliers

Choose suppliers with values that align to yours

Maintain clear, consistent communication

Consider cultural differences

Establish clear processes

Reward loyalty

Relationships first

6 financial services trends in 2024 and beyond

1. Blockchain technology in financial services is on the rise

2. The industry is embracing AI and data analytics in financial services

3. Global growth has remained weak

4. Increasing cybersecurity concerns

5. Innovative financial products are more readily available

6. Banks are being forced to embrace change

The future of finance

The industry challenges driving different types of business loans and funding solutions

The limitations of traditional funding and business loan options

Unlocking the power of trade finance and invoice finance for your transport business

Go further with Octet’s working capital solutions

When and how to access working capital finance

Common types of working capital finance

The benefits of working capital finance

How to Calculate Working Capital

Working Capital = Current Assets – Current Liabilities

Octet Working capital solutions – powering business growth

Discover how to partner with Octet today

The challenges of healthcare supply chain management

How to build resilience in a health supply chain

Utilising automation and data analytics

Focussing on stakeholder engagement

Undertaking risk and resiliency planning

Increasing visibility

Developing protocols for internal teams

How Octet can help streamline healthcare cash flow

Strengthen your healthcare supply chain with Octet

6 global supply chain issues and trends in 2024

1. More circular supply chains

2. Ongoing skills shortages

3. Increased consumer pressures

4. Rising inflation and economic instability

5. Ongoing supplies shortages

6. Easing of shipping pressures