New data from the Commonwealth Bank has found 55 per cent of businesses perceive invoicing finance as a last resort, while 71 per cent of businesses admitted to having limited knowledge of how the process works.

Clare Morgan, Executive General Manager of Business Lending says invoicing finance has conventionally been thought of as very manual and slow. She says this is why CBA is reimagining invoice financing to offer a unique digital proposition, in partnership with fintech Waddle.

Rolling out nationwide this month, Stream Working Capital is CBA’s new digital lending solution which gives businesses access to funds using their outstanding invoices as loan security.

“We’re increasingly getting more questions from our customers about invoicing finance. We don’t view our product as invoice financing, rather we’re calling it digital working capital.

“It’s about moving away from the more traditional forms of lending and moving towards unlocking some of the value that’s trapped in assets such as receivables and inventory.

“Stream Working Capital sees us effectively lending against invoices, so businesses are seeing credit limits adjust in real-time based on the value of current outstanding invoices. As the solution is digital end-to-end and integrated with cloud-based accounting software such as Xero, a lot of customer pain points are removed. It’s transparent, available 24/7 and offers very fast funding, with a turnaround time of 72 hours, compared to an industry standard of several weeks,” said Ms Morgan.

The research shows half of all businesses would be more likely to use invoice financing if it was offered with their existing business bank (50 per cent), if it was simple and transparent (47 per cent) and integrated into their accounting software (41 per cent).

The partnership with fintech Waddle, means much of the working capital finance process can be automated such as the credit assessment, underwriting and monitoring, to ultimately deliver a better customer experience and faster access to cash.

“Having access to consistent cash flow is vital for every Australian business and we wanted to simplify and digitise the process in order to offer greater flexibility and support for those who need it. We know from speaking to customers and from the research that uneven cash flow is the cause of significant stress for many businesses.

“Using invoices to access credit provides peace of mind for businesses who can now access cash locked up in their invoices, assisting them to pay suppliers or hire employees. It’s an essential part of helping small businesses recover and grow as the economy starts to reopen and businesses navigate this new operating environment,” said Ms Morgan.

Two-thirds of businesses (66 per cent) feel frustrated by uneven cash flow, while three in five business owners (60 per cent) feel at the mercy of their customers paying on time. Three-quarters of businesses (76 per cent) reveal cash flow issues are limiting their growth, stability and ability to expand or fulfil large orders.  

Jarrod McGrath is the founder and CEO of Smart WFM, a boutique Australian consultancy with a global presence that empowers its clients to stay relevant in a time of rapid digital advancement. Mr McGrath says Stream Working Capital has been essential for taking the stress out of hiring new staff and allowing him to feel more confident about growing his business.

“We were growing so rapidly and bringing on new staff, however, it can be up to 120 days before that new team member is able to generate cash for the business. That’s what I use the facility [Stream Working Capital] for, to help bridge that gap in between recruitment, on-boarding, upskilling, client engagement and right up to the point of invoicing and then revenue generation.

“It’s been key for being able to scale quickly and because of access to this facility, I’m able to pay salaries from the day I onboard someone, which means I can keep growing and stay in control of my business. Being able to employ a capable team member with confidence is gold to me because it means business growth. 

“Smart WFM’s compound annual growth rate from a revenue perspective over the last three years has been substantial. From a headcount point of view, we’ve seen over 220 per cent growth over the last three years. Stream enables us to maintain a substantial growth rate like that and keep that rapid headcount growth in place.”

New and existing small business customers can apply for Stream Working Capital from this week by talking to their business banker. For more information visit commbank.com.au/streamworkingcapital. 

Also read Small business Answers guide to loans and equity funding.

Despite parts of Australia experiencing some of the world’s longest lockdowns, Australia’s small business recovery insights showed the sector experienced growth as more people turned their side hustles into a reality. 

To shed light on the impact the global health crisis – and ongoing recovery – has had on small businesses, Mastercard today released Recovery Insights: Small Business Reset. 

Recovery Insights: Small Business Reset identifies several key trends for Australia:

• Entrepreneurship: 
  • Almost three-quarters more small retailers launched in 2020 than in 2019. The number of new SMBs in Australia grew 73% in 2020 vs. 2019
  • Australia is ranked in the top three countries for global SMB YoY growth, behind the UK (101%) and the United States (86%)
• E-Commerce: 
  • Following shutdowns, the number of businesses going online each month more than doubled from pre-pandemic levels, peaking in July 2020. In fact, 60% more merchants accepted e-commerce sales in 2020 for the first time vs. 2019)
  • This reflects increased demand for an online sales channel, as well as the slight lag after lockdowns began to bring it into reality. The shift to digital has persisted at an elevated level since. 
• Closures: 
  • Small businesses that closed early in the pandemic were about three times as likely as larger businesses to remain closed long term
  • In Australia, 34% of small businesses that closed during the pandemic remained closed at six months, 3.1 times higher than large businesses (11% of large businesses remained closed after 6 months)
• Location: 
  • In April 2020, spending at SMBs and large businesses in Sydney’s central business district are roughly half of 2019 levels, down 54% and 57% respectively, and largely remained the same in August 2021, at 54% and 56%.
  • Spending at SMBs outside of Sydney’s central business district is down only 16% vs 2019, while spending at large businesses outside in more residential neighbourhood areas performed much better only 6% down vs. 2019 levels.
  • SMBs in Sydney’s residential parts of the metro area/city saw retail spending increase 19.9% August YTD vs. the same period in 2019, though retail sales were more significant for large businesses, seeing a 28.5% increase August YTD vs. the same period in 2019

The insights draw on the Mastercard Economics Institute’s new Small Business Performance Index* of aggregated and anonymised sales activity within the Mastercard network. You can check out the report and find out which suburbs in Melbourne and Sydney are considered Underperforming, Recovering,  Stable, or Outperforming.

So, you’re an online Aussie business and you’re driving new sales and orders. Whether you’ve been faced with new challenges amidst local lockdowns or thinking about maximising your reach in international markets, opening your business to online global sales comes with new considerations.

Take it from me as a small business owner; if you aren’t already familiar with transferring money from one currency to another, it can definitely be a learning curve, but it doesn’t have to be a challenging one.

Financial diligence can be simple, yet is so often overlooked.

From my own experiences growing Cake Maternity’s online presence, we were able to navigate the shift from local to global by learning some foreign exchange (FX) hacks to sidestep any tricky hidden fees, which could also help you tap into the international market or maximise what you’re already doing.

We established Cake Maternity, an Australian premium online maternity lingerie and clothing store, in 2007. So we’re no stranger to the masses of people now shopping online. After seeing the restrictions imposed during the pandemic, we knew this number would only increase in Australia, and globally.

With customers browsing and buying more online, tailoring our offer to the different markets to stay competitive paid off! We generated an increase in our online sales volume by seven-fold in 2020. We also estimated saving approximately $20,000 last year by using an OFX Global Currency Account.

So, what are the FX hacks and lessons I’ve learnt when it comes to selling globally online?

Lesson 1: Go local to go global with your online global sales

While global demand for your product may exist, selling abroad is not a simple “plug & play” operation. It became pretty evident early on for us that we weren’t going to successfully compete in the overseas market, should we not localise our offering. Adapting the customer experience (CX) to the specific market you are looking to sell in is key.

By creating a fully localised approach, from trading in local currencies and offering comparable pricing, to having an on-site support team and investing in competitive delivery times, our business was able to overcome competitive barriers.

Lesson 2: Make FX part of your strategy from the outset 

We expanded in Europe, Canada and our now biggest market, the US, which contributes to over 50% of our sales annually. However, what I quickly learnt was that one of the most challenging pieces behind a global sales and distribution strategy is the handling and flow of funds, without losing significant margin due to currency transfers.

Transforming from a local Aussie business to a global e-tailer means we now accept payment in seven different currencies across various payment gateways. Seeking FX specialist support early on in the piece allowed us to establish the right FX strategies for our business and helped minimise impacts on our profits from hidden exchange rates or currency fluctuations.

Lesson 3: Think beyond your bank for FX

With so many payment flow considerations, the complexity of it all can be daunting – not to mention, it can also impact your business’s bottom line. Implementing a global sales and distribution strategy also includes knowing the best ways to tackle these barriers.

We found working closely with FX specialists helped grow our understanding of how to set up the right processes to secure competitive rates on our international transfers. In my experience, traditional banks are not necessarily proactive with currency handling or foreign exchange advice for SMEs, and there is lots of red-tape and challenges which can hinder Australian businesses from creating a bank account overseas. I’ve found turning to specialists like OFX, who work to provide tailored solutions while demonstrating an interest in my business, always make me feel like I am in safer hands.

Using a multi-currency account also helped us avoid multiple conversion and merchant fees that you can incur if making transfers directly through marketplaces and payment gateways.

For example, PayPal charges 4% above the base exchange rate when converting payments received in another currency. The base exchange rate is determined by the wholesale currency markets on the conversion day or prior business day. You’ll be charged for paying for goods or services in a different currency to what the goods or services are listed in, or for services where your recipients receive a different currency from the currency you pay.

A practical checklist to not drown in a sea of currency risks

Managing international payments, alongside the number of competing priorities that come with running an online global sales business can be overwhelming. But information such as how to save on transfers or navigate currency volatility can often be provided quickly when working with an FX expert. 

For me, setting up the right foundations when it comes to handling global payments and multiple currencies has been key to success in global eCommerce. Having picked up a few tricks over the last decade on how to navigate foreign bank systems and make international payments, let me share a handy list to check how you’re using FX/CX for your business:

• Understand market peculiarities and offer local, compatible prices
• Pay local suppliers in local currencies where possible
• Lock in favourable exchange rates  through Forward Contracts (these can help you lock in  favourable rates for up to 12 months)
• Pay foreign suppliers from localised bank accounts
• Don’t be afraid to ask for better exchange rates, especially for larger transfer amounts
• Be mindful of hidden fees and higher exchange rates when using payment gateways such as Paypal, as it automatically converts payments received in another currency.

Author Bio:

Keith Hyams is the Managing Director of Cake Maternity, an online retailer which offers premium maternity clothing and is the go-to platform for time-poor mums looking for essential nursing wear. Cake Maternity is available in Australia, the US, Canada and Europe.

Keith Hyams has been a client of OFX since 2011 and worked with OFX on the development of this piece.

Flight Centre Travel Group has announced the stellar line-up and opened registrations for Illuminate 2021, the most anticipated corporate travel event of the year, taking place on Thursday, 21 October.

Illuminate 2021 is a virtual event where some of Australia’s top business leaders will be sharing their advice to businesses of all sizes. Any small business in the travel industry will find it valuable. Speakers will share advice on business travel endurance and recovery strategies and how to navigate industry issues post-pandemic. Insights will also be shared on Australia’s economic recovery and its impact on business.

Illuminate 2021 will offer an immersive and interactive experience for all attendees. The theme is ‘Time to Fly’ and will light the way forward for the business travel industry, exploring how companies can navigate travel once domestic and international borders are lifted.

Keynote speakers Alan Joyce and Jayne Hrdlicka will join Westpac Chief Economist Bill Evans, human behaviourist and co-founder of The Behaviour Report, Dan Gregory, and gold medallist swimmer and Tokyo 2021 open ceremony flag bearer for Australia, Cate Campbell, OAM, with a collective focus on business travel endurance and recovery strategies, while combatting industry issues post-pandemic.

“We’re delighted to bring Illuminate back after a one-year hiatus. It continues to be a truly stand-out event for the corporate travel industry across the country,” said Managing Director of Flight Centre Travel Group in Australia, James Kavanagh.

“Our sterling line-up of top industry leaders and inspiring speakers will share key insights for a return to travel, including exploring the way forward for businesses, the industry post-pandemic, and the path to freedom we can all look forward to.

“I encourage all businesses that travel to attend the event to equip themselves with the knowledge and tools needed to help them to return to travel safely and effectively. Innovation is at the very heart of what we provide for clients and customers, and the virtual event will also showcase that.”

Illuminate 2021 agenda

• 9:00 am to 09:30 (AEDT): Partner Showcase
• 9:30am to 9:50am (AEDT): Flying High in a Post-Pandemic World – Qantas CEO Alan Joyce takes us on a journey of what to expect domestically and internationally for the remainder of 2021 and beyond
• 10:00am to 10:15am (AEDT): No more talking heads. Why face to face is critical for businesses and brands – CEO of the Impossible Institute and a specialist in human behaviour is Illuminate guest speaker Dan Gregory
• 10:15am to 10:25am (AEDT): Swimming towards 2032 – FCM’s General Manager Melissa Elf and swimming gold medallist Cate Campbell, OAM, discuss navigating change and what it takes to succeed in the face of a pandemic and beyond
• 10:30am to 10:45am (AEDT): In Panel: Putting Responsible Travel into practice – Responsible Travel – what is it, and how is it influencing travel programs and business strategy?
• 10:45am to 10:50am (AEDT): The future has arrived… in the USA – If the travel environment in the USA is anything to go by, we better prepare for a speedy return to elevated business activity
• 10:50am to 11:10am (AEDT): Partner Showcase
• 10:55am to 11:00am (AEDT): It’s time to hit the reset button for the hotel industry – General Manager of FCM Consulting, Felicity Burke, along with Quest’s Anthea Dimitrakopoulos talk hotel trends – rates, occupancy levels, location, demand, and forward predictions
• 11:15am to 11:30am (AEDT): Bill Evans puts the future of finance into perspective – Business is one thing. But economic markets are another. Get up to speed on what the fiscal future looks like with Bill Evans, a renowned Australian Economist
• 11:40am to 12:00pm (AEDT): Virgin poised and ready for post-pandemic success – Virgin Australia Group CEO and former Chief Executive at Jetstar and A2 Milk Jayne Hrdlicka will talk to Virgin Australia’s business transformation and direction for the future
• 12:00pm to 12:20pm (AEDT): The Covid Classroom – Grab your fins and mask as Flight Centre CEO Skroo Turner takes a deep dive into the important lessons of 2020 and how pivoting is here to stay for the travel industry
• 12:30pm to 13:30pm (AEDT): Partner Showcase
• 13:30pm (AEDT): Close.

Illuminate 2021 will be live-streamed via OnAir by Events Air from 09:00am to 13:00pm (AEST) on Thursday, 21 October 2021. FLIGHT CENTRE Travel Group (FCTG) has opened registrations for Illuminate

October is Cybersecurity Awareness Month with ‘Do Your Part. #BeCyberSmart’ as this year’s overarching theme to help empower organisations and individuals to own their role in protecting businesses and themselves against potential threats and cyberattacks.

To look at the problem at the employee level, it is essential to change the mindset of your staff when it comes to cyber safety. Data from Check Point Software, a leading provider of cybersecurity solutions globally, can reveal an Australian organisation has been attacked on average 460 times a week in the last six months. And when looking at attack vectors, 72% of threats in the past 30 days were via email through the end-user.

With team engagement front and centre as a key element of protecting businesses from the costly repercussion of breaches, companies need to rethink their approach to training. Generally speaking, it boils down to three main reasons employee training might not work – it isn’t planned properly, engaging or personal.

Ashwin Ram, Cyber Security Expert of Check Point Software, his advise to help businesses with their security training:

5 tips on how to build an engaging cybersecurity awareness program

• Provide Context – There are different ways in which you can approach context. When explaining a solution, you can focus on making it about the audience instead of simply giving the problem followed by the answer.
• Share a story – Sometimes, the intended message gets lost in technical terms and boring presentation slides. A story can break this pattern, grab the listener’s attention, and create something memorable for them.
• Use visuals – There are many reasons why visuals make sense in a training course – for visual learners, infographics, tables, and charts can help understand things faster and recall information better. The appeal of visuals goes beyond learners who prefer them. Visuals help in bringing out the meaning in our words.
• Make it interactive (i.e. fun) – These days, there are many ways of easily making courses interactive, including online exercises and quizzes, security awareness challenges, and point systems connected to successfully completing tasks.
• Keep it frequent (i.e. events) – Training programs should be more than something done once per employee or once per year to meet compliance standards. Create a quarterly cybersecurity boot camp to take your team through updates and insights so they feel as much a stakeholder in protecting the business

Read more from Small Business answers with our guide on cyber threat.

Clearco, one of the most prolific funders of emerging fashion, beauty and other brands is entering Australia with an AU$100 million e-commerce funding available.

• New investing model uses AI to offer funding that is age, gender, race, and region agnostic
• Australian start-ups Beard Market, Vegan Grocery market and Jolyn Swimwear first to benefit from new funding model

Australian businesses Beard Market, Vegan Grocery Store and Jolyn are amongst the first to receive a financial lifeline with the announcement that the world’s largest e-commerce investor, Clearco has launched in Australia with at least AU$100 million to invest in digital-first Australian businesses.  

Using AI technology that literally ‘changes the face’ of investment by preventing discrimination and bias based on the age, gender, race, or location of the applicant, Clearco is revolutionising the way Aussie founders grow their businesses.  If you have monthly revenue of around AU $10,000, you can apply to Clearco and get access capital within 24-48 hours.  Clearco does not take equity and charges a flat fee in the form of a portion of future revenues.  

One of the first Australian digital-first businesses to be supported by Clearco is Beard Market, a one-stop shop marketplace for all men’s grooming and hair care products.  The company took its first advance from Clearco in May 2021 which resulted in the growth of a 200% increase in revenue.  

Beard Market founder Onur Cam commented “Clearco has more advantages for my business than any other financial institution can offer. The top-ups and percentage of remittance of daily sales is low, which is my priority for the business. Financial institutions I have used in the past have taken up to 30% of daily sales, while Clearco only takes 15%. Clearco is a fiercely competitive option and the most profitable for my business. It is my first and only choice for financing.”

With continuing lockdowns around Australia, Aussies’ online spending has grown exponentially and their interest in new Direct-to-Consumer brands such as Beard Market is booming. Yet for businesses headed by females, founders of colour or regional entrepreneurs the challenges in securing funding are high.  By contrast, in 2020, Clearco funded eight times as many companies headed by female founders and five times the amount of funding to companies headed by founders of colour, compared to traditional VC firms.  

Dan Peters, newly appointed Clearco Australia Managing Director said “Our goal is to support a thriving start-up ecosystem for Australia and drive smarter and more diverse capital into Australian eCommerce businesses. We want to see businesses grow and flourish and drive innovation in the Australian economy.”

Clearco recently secured $215 million in new funding round from Softbank and has already raised $100M in Series C to reach unicorn status.  

Australian Founder Stories

• The Vegan Grocery Store, a one stop shop for vegan groceries and specialty products with the largest selection of vegan foods in Australia, has experienced a 37% increase in online revenue growth since taking its first advance from Clearco in June this year.  Jessica Baily, the founder, commented: “Normally when you get finance through banks, you have to fill out tons of paper, and they make you feel like you’re having to grovel and beg. It’s a horrible experience.”
• Jolyn, a swimwear brand specifically designed for female athletes, has seen a 21% increase in monthly revenue growth in the three months since they took Clearco capital to expand their inventory.  Jolyn Director Trent Goulding said “Traditional capital raising is time consuming and a lot of effort starting with scratch every time you talk with a new bank.  Clearco is tech-savvy and looks logically at our turnover and data, streamlining the whole process.”
• Zookal is an online educational technology platform that helps make education more accessible to students. They sell textbooks online as well as offer services such as homework help, test prep, and a solutions library.   The company took its first capital advance in July 2021 to support its launch into Singapore and Philippines which gained them 10,000 daily users in two weeks. Co-founders Ahmed Haider and Manuel Silva said “We have two peak periods in the year where our marketing expenses and inventory double or even quadruple. In August, rather than paying $1.5 million to our suppliers and having to forego that capital in the same month, Clearco gave us the chance to extend that inventory payment 8 months on average, which extends our runway a lot. In terms of marketing, we’ve moved away from using credit cards .”

Also read Small Business Answers guide to Loans and equity.

The last 18 months have driven phenomenal growth in the ecommerce sector, with the first eight weeks of FY21 alone delivering 80 per cent ecommerce growth for Australia Post. There has been a boom in Australian creators and entrepreneurs bringing their ideas to life through easy-to-use retail operating systems, and a whopping 100,000 of those have been on Shopify. 

As opposed to traditional software, which took months and hundreds of thousands of dollars to customise, today’s off-the-shelf options enable new stores to be up and running in a matter of minutes, and expanded partnerships, such as those with the Victorian State Government, are also introducing financial and training benefits for those joining the ecommerce world for the first time. 

One of the most common challenges I come across with small business owners is search engine optimisation (SEO). Many small businesses find getting an ecommerce site online to be the easy part, but driving traffic to the website with SEO can be complicated. There is an overwhelming amount of information about SEO online, and with the constantly changing algorithms of different search engines, it can be difficult to keep updated with the technical side of things. 

For those who are new to navigating SEO for ecommerce websites, here are some basics worth investing some time in. For those already using Shopify, you can find some specific SEO improvement tips here.

1. Do your keyword research

Keywords are the queries and phrases people use and type into search engines to find what they’re looking for. When it comes to choosing keywords, you want to select ones that will help your web page rank highly in search engines — helping people get connected to your page faster, not your competitors’ pages.

To do this, it’s important to consider the customer journey in using search engines, and back this up with the use of the many SEO tools available.

Understanding the intent behind a customer’s search query will help you identify the right keywords. It might be to seek information — such as ‘how to’ or ‘what’ or ‘why.’ In this case, providing web content that genuinely helps and provides answers to these questions ranks well. Other times, people are searching for a product — either knowing what they are looking for at the outset or wanting to confidently make a choice to purchase something. In this case, customers are demanding information first, and make a transaction later. 

Use the paid or free tools at your disposal to select the correct keywords. There are a great many available, but the best free tools for Chrome are Keyword Surfer and MozBar, both available as extensions.

2. Match search intent

Whether you are aiming to match an informational or transactional search query, Google and other search engines’ primary aim is to rank the pages with the best chance of concluding the customer’s journey. 

It’s fairly easy to get a robust idea of what your search intent can and should be: just turn to Google. Look at the top 10 results when you type in your expected keywords and take note of whether they are transactional or informational based. Top ranking websites will generally have a combination of both. Furthermore, observe the ‘related searches’ box at the bottom of Google — it will give you an idea of what customers are expecting to find from their search query.

For example, typing in ‘earl grey tea’ yields related search results such as: ‘earl grey tea recipe,’ ‘earl grey tea benefits’ and ‘earl grey tea ingredients.’ Such phrases are useful when building out content across your site.

3. Optimise your content

Content optimisation helps your website pages rank higher in search results related to their target keyword. This involves taking a microscope to each of your web pages, looking closely at the written content, meta descriptions, and title tags.

To begin, ask yourself this simple question: “how can I make it clearer to customers what this page is about?”

• Does the heading easily describe what is on the page?
• Is the keyword regularly featured in the written content of the page?
• Does the meta description entice you to click through?
• What are the image file names? Do they have alt text filled in that translates what is displayed in the image?

Once you’ve got the basics of SEO, make sure it does not become a “set and forget” exercise. There are many aspects to SEO, where the rules are constantly evolving, and often, so is the behaviour of your customers. Learning new digital tools and building skills does take some time and focus, but for long-term success and continued growth, an ongoing and iterative approach to SEO will help deliver the results entrepreneurs are working hard to achieve. 

By Jasmine Workman, Senior Regional SMB Lead, Shopify APAC

Also read Small Business Answers guide to SEO and SEM.

Changes to lending markets over the last decade means there is now a wide range of finance options available for small businesses that don’t require property as security, according to a new report by the Productivity Commission.

“Every year, one in six small and medium enterprises (SMEs) seeks finance to fund and grow their business. Traditional SME loans are usually secured by a property. But spurred by new technology and new data, lenders now have more capacity and confidence to lend to SMEs using other forms of collateral or even lending unsecured,” Productivity Commissioner Catherine de Fontenay said.

There are 2.4 million SMEs in Australia employing more than 7.4 million Australians. “These businesses are the engine room of the Australian economy and a healthy small business sector is vital to the economy, especially as we recover from the COVID pandemic,” Commissioner de Fontenay said.

The report points to a significant evolution in the lending market for SMEs over the last decade, driven by technology and new business models.

While SMEs still mainly obtain their finance from the major banks, there is now a much broader range of products available from traditional and new lenders.

“A broader range of products can provide SMEs with finance more quickly and flexibly, allowing them to seize opportunities. Some SMEs may even be able to borrow for the first time,” Productivity Commissioner Malcolm Roberts said.

SMEs may not be aware of all their lending options and may not feel confident about new options. Brokers can help match them with appropriate lending options.

“Finding the right product may be challenging, but the benefits can be significant,” Commissioner Roberts said.

The report found the finance market is increasingly competitive, which will drive further improvements in access to finance for SMEs.

The full report on Small business access to finance: The evolving lending market can be found at: www.pc.gov.au.

Also read Small Business Answers guide to Loans and equity.