supplier

7 Ways to Get Better Deals from Suppliers

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Optimising Supplier Relationships to Boost Business Profits

Effective Negotiation Strategies for Cost Savings and Long-term Success

Sometimes business profits suffer because of spending too much with certain suppliers.

In the competitive business world, getting the best terms with suppliers improves margins and lays a foundation for long-term success. Startups and well-established entities that negotiate effectively enjoy significant cost savings and improved supplier relationships.

Here are seven ways to get better deals with suppliers:

Research Market Prices

Gather information on standard industry prices before starting negotiations. This forms a benchmark for determining a fair deal.

For example, a buyer of marketing services asked for proposals from three competitors. They revised terms with the existing supplier which resulted in a cost savings of 7%.

Build Long-term, Strong Relationships

Good supplier deals arise when there’s a win-win situation. A supplier who greatly values you as a customer is more likely to give favorable terms when you need them. This happens when there’s regular and respectful communication.

For example, a retail chain developed a strong relationship with its clothing supplier over several years of collaboration. When the retail chain faced financial difficulties, the supplier offered extended payment terms and a temporary discount to help the retailer through its challenges.

Volume Discounts

Consider proposing bulk purchases in exchange for a discount. Suppliers are often willing to reduce prices for larger orders.

For example, a restaurant chain negotiated a volume discount with its food supplier by committing to purchasing a certain quantity of ingredients each month. This allowed the restaurant chain to reduce food costs by 15% while ensuring a stable supply of ingredients.

Ask for Payment Terms

Negotiating payment terms that favor cash flow can be just as important as the price. Request longer payment periods or discounts for early payments.

For example, a small manufacturing business negotiated with its raw material supplier for extended payment terms from 30 days to 60 days. This adjustment allowed the business to align its cash outflows with its production cycle, resulting in improved cash flow and more financial stability.

Seek Value-Added Services

Look beyond the price tag for additional benefits. Suppliers might offer complimentary services like free shipping, training, or extended warranties.

For example, an electronics retailer negotiated a deal with a supplier to include free installation services for the products they purchased. This added-value helped the retailer attract more customers and differentiate itself from competitors.

Be Open to Compromise

A successful negotiation often involves give and take. Be prepared to find a middle ground that satisfies both parties.

For example, a construction company needed to purchase new equipment but was unable to pay the full price. After negotiating with the supplier, they agreed to a lease-to-own arrangement, allowing the company to acquire the equipment at a lower cost over time.

Have Multiple Options

Avoid relying on a single source. Collaborate with alternative suppliers to strengthen the negotiating position and secure the best possible deal.

For example, an IT company sought bids from multiple software vendors for a new project management tool. By comparing offers and negotiating with multiple vendors, they were able to secure a more competitive price and favourable contract terms.

By implementing these strategies, you can improve your business’s cash flow and ensure greater financial stability for the future. Remember, effective cash flow management is key to sustaining and growing your business in the long run.

For more tips, advice and bookkeeping essentials for your business, visit How We Help You and get started today with Notch Above Bookkeeping, Australia-wide or call our Xero bookkeeping specialists on 1300 015 130.

cash flow graph

Strategies to Boost Business Cash Flow

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10 Practical Strategies to Boost Your Business Cash Flow

Improving Financial Stability and Ensuring Long-Term Success

We sometimes see businesses which are healthy, growing, reputable, and stable… but their cash resources are limited. And that’s an impediment to operations running smoothly and ensuring long-term success.

Here are 10 practical strategies to help you boost your business’s cash flow:

Invoice Promptly

Send out invoices promptly after completing a job or delivering a product. Offer incentives for early payment to encourage prompt settlements.

Tighten Credit Terms

Review credit terms with customers and suppliers. Shorten payment terms for customers and negotiate longer terms with suppliers to improve your cash flow cycle.

Monitor Expenses

Keep a close eye on your expenses and identify areas where you can cut costs. Look for opportunities to renegotiate contracts, switch to more cost-effective suppliers, or eliminate unnecessary expenditures.

Improve Inventory Management

Optimise inventory levels to avoid excess stock sitting on shelves tying up cash. Use forecasting tools to better predict demand and adjust ordering accordingly.

Negotiate Supplier Discounts

Negotiate discounts with suppliers for early or bulk payments. Take advantage of any available discounts to reduce purchasing costs and improve cash flow.

Offer Discounts for Early Payment

Encourage customers to pay invoices early by offering discounts. Even a small discount can incentivise customers to settle their accounts sooner.

Monitor Cash Flow Regularly

Keep track of cash flow on a regular basis using cash flow forecasts. This will help you anticipate any potential cash shortages and take proactive measures to address them.

Improve Debt Collection Processes

Implement efficient debt collection processes to minimise overdue accounts. Follow up with customers promptly on overdue invoices and consider using automated reminders.

Explore Financing Options

Consider alternative financing options such as lines of credit, invoice financing, or business loans to bridge any cash flow gaps during periods of growth or unexpected expenses.

Focus on Profitable Sales

Concentrate efforts on generating sales that contribute positively to your bottom line. Identify your most profitable products or services and allocate resources accordingly to maximise revenue.

By implementing these strategies, you can improve your business’s cash flow and ensure greater financial stability for the future. Remember, effective cash flow management is key to sustaining and growing your business in the long run.

For more tips, advice and bookkeeping essentials for your business, visit How We Help You and get started today with Notch Above Bookkeeping, Australia-wide or call our Xero bookkeeping specialists on 1300 015 130.

manufacturing

CSIRO ‘Innovate to Grow’ program

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Australia’s national science agency, CSIRO, is inviting small to medium enterprises (SMEs) working on advanced manufacturing solutions to apply for a self-paced, 10-week, online program that can help them turn an idea into an R&D opportunity.
Innovate to Grow: Advanced Manufacturing is open to SMEs working in the following sub-sectors:

  • Robotics
  • Additive manufacturing
  • Advanced materials and processes
  • Mechatronics design and engineering
  • Energy storage and battery technology
  • Sensing and detecting technologies
  • Natural products manufacturing
  • Biomedical manufacturing

Learn more and apply for the Innovate to Grow: Advanced Manufacturing program or discover more programs for SMEs.

Applications close on 12 May 2024.

‘Innovate to Grow’ was launched in 2020, and in just four years the free program has equipped over 500 SMEs with the knowledge and tools required to progress their research.

CSIRO recently announced a $20 million investment to provide SMEs with greater access to vital research and development (R&D) opportunities to accelerate their growth.

The funding will support an additional 600 SMEs through its Innovate to Grow program, kicking off with its Advanced Manufacturing cohort.

Source: CSIRO News

Artificial Intelligence AI

AI Adopt funding program

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Funding for Artificial Intelligence (AI) Centres to help SMEs adopt AI technologies

The AI Adopt Program provides funding to establish up to five AI Adopt Centres to support small and medium-sized enterprises (SMEs) that engage in international and interstate trade to adopt responsible AI-enabled services and enhance their businesses.

Key points

  • Grants between $3 million and $5 million over four years for up to 50% of eligible project expenditure are available
  • Businesses in Australia that can establish centres to help Australian SMEs adopt AI technologies in their business can apply
  • Closing date: Monday 29 January 2024 5:00pm AEDT

Overview

The program will create a network of AI Adopt Centres, aimed at establishing a ‘front door’ for SMEs looking to explore responsible, safe adoption and usage of AI.

The objectives of the program are to:

  • support the safe and responsible adoption, implementation, and demonstration of real-world applications of AI technologies to address sectoral and local challenges
  • support SMEs to responsibly integrate AI products that assist in development of new or improved products and services
  • improve Australia’s future prosperity and our productivity growth by increasing AI adoption in SMEs and upskilling Australian workers in the usage of AI technologies
  • support a growing network of Australian AI capability that provides expertise, business and technical skills, connectivity, and access to research and partnerships. This includes engagement with the National Artificial Intelligence Centre and the Responsible AI Network to build a cohesive and comprehensive network
  • provide equity of access to SMEs nationwide who are operating within the identified sectoral area, aligned to the National Reconstruction Fund (NRF) priorities
  • create further opportunity for growth in the AI technology market through a broad increase in international demand for Australian AI capabilities
  • positively impact participation of underrepresented cohorts in technology, including women, First Nations Australians, and those with disability
  • support the Australian Government in reaching its target of 1.2 million tech-related jobs by 2030.

The intended outcomes of the program are to:

  • increase SMEs capacity to responsibly, safely and effectively utilise AI technologies by providing guidance, specialist training and access to specific talents and expertise
  • increase awareness and workforce skills within the SME sector of responsible AI adoption
  • increase SMEs productivity through using AI products to promote product development, and build efficiencies in NRF priority sectors.

Check if you can apply

You can apply if you meet the eligibility criteria. The eligibility criteria are a set of rules that describe who can be considered for this grant. You can apply if you:

  • are an eligible entity
  • meet additional eligibility requirements
  • have an eligible project
  • have eligible expenditure
  • can fund your share of the project costs, and any ineligible expenditure.

The Notch Above Team would like to wish you and your family a wonderful festive season and a prosperous 2024. This year we’re taking a break over Christmas / New Year and will be closed from 2PM on Friday 22 December, reopening on Monday 8 January 2024.

Source: business.gov.au

job interview

Qld Workforce Connect Fund

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Queensland Workforce Strategy

Workforce Connect Fund

Through the Workforce Connect Fund, small businesses can apply for an HR Support Grant of up to $5,000 (subject to available funding) to implement new and innovative HR solutions to address an immediate need.

Speak to an Industry Workforce Advisor about accessing the grant and enhancing your HR strategy today.

Learn more about the Workforce Connect Fund initiative here.

Having trouble retaining employees?

Building strong and productive working relationships is integral to the success of any business, but what do employees want? Sometimes the answer to that question is not so easy to find!

That’s why the Back to Work team has released the Harrison Tool for Retention — to help employers retain staff within their business.

Using the tool, employers can start conversations with their employees about what motivates them, their strengths and how they can work together.

Learn more about the Harrison Tool for Retention or the other support available through Back to Work here.

Notch Above Bookkeeping are Xero business bookkeepers and Certified Xero Platinum Partners Australia-wide, specialising in cloud bookkeeping setup, training and ongoing support. Contact us on 1300 015 130.

innovation

QLD Ignite Spark Funding closing soon

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Supporting Queensland innovation-driven enterprises

Apply by 31 October 2023

Ignite your innovation with up to $75k Ignite Spark funding and business mentoring

If you’re a Queensland small or medium-sized enterprise with an innovative new product or service prototype to finesse, then here’s a chance you don’t want to miss!

  • The Advance Queensland Ignite Spark Program provides up to $75k funding to develop your prototype towards minimum viable product stage and ready for commercialisation
  • Successful applicants also gain privileged access to the Ignite+ program offering a wealth of professional expertise, invaluable business advice, and dedicated mentoring to propel your business forward
  • Access program guidelines and apply today.

About the program

The Ignite Spark Program aims to support Queensland-based small to medium-sized innovation-driven enterprises with high-growth potential to progress the development of an innovative product or service closer to market.

In particular, the program aims to support innovation-driven enterprises to progress prototypes to advanced staged products and/or services that have been tested, validated, customer endorsed and are ready to be commercialised.

An innovation-driven enterprise is a business that emphasises innovative solutions as a key driver of growth, competitive advantage, and value creation. Such enterprises focus on developing and commercialising new products and/or services to achieve their strategic objectives.

The objectives of the program are to:

  • strengthen key industries in Queensland
  • diversify the Queensland economy
  • compete in domestic and global markets
  • engage and/or benefit regional Queensland
  • create new jobs, now and into the future.

Funding and support

Funding of $50 000 to $75 000 (excluding GST) is available for projects with a duration of up to twelve months with a matched funding contribution from the applicant organisation in either one of two tiers. Organisations and their related parties are limited to one application per funding round.

Application process and timeframes

  • The program has a two-staged application process – an Expression of Interest application being the first stage followed by a Full Application stage for shortlisted Expression of Interest applicants
  • All applicants will receive written notification of the outcome of their Expression of Interest application to the email address provided in the application form.

Eligibility

To be eligible for funding, applicant organisations must, at the time of application:

  • be a business headquartered in Queensland
  • have no more than 50 full-time-equivalent employees
  • not be a subsidiary of a group of companies that has more than 50 full-time-equivalent employees
  • not have received funding for the proposed project activity from either the state, federal or local government
  • be registered for GST (at time of Full Application submission).

To be eligible for funding, at the time of application, projects must:

  • have an existing functional prototype for a product and/or service that is scalable to meet industry/market demand
  • demonstrate that the product and/or service is ready to be validated in an industrially or operationally relevant environment
  • demonstrate that the product and/or service is not currently in market.

Notch Above Bookkeeping are Xero business bookkeepers and Certified Xero Platinum Partners Australia-wide, specialising in cloud bookkeeping setup, training and ongoing support. Contact us on 1300 015 130.

cash flow

Getting paid on time

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6 Ways to Improve Cash Flow by Managing Receivables

Need to forecast and improve your cash flow? All businesses should carefully monitor their cash position.

Healthy cash reserves enable investment in growth, allow distributions to owners or – for some businesses – can be a matter of survival. In any case, cash management is critical.

One way to improve the cash position is to carefully manage Accounts Receivable (or collections). Here are some Best Practices which can positively impact the cash position.

1. Set weekly cash collection targets

Accounts Receivable (AR) management is an important business process and clear targets should be set. Short-term targets help you chip away at the larger AR balance. These targets can be increased or decreased depending on your cash requirements and the total AR balance at any time.

2. Improve the invoicing process

It’s difficult to maintain a low AR balance when invoices are sent late or contain errors. Also, an overdue invoice should immediately trigger follow-up actions, signalling to your customer that you are serious about collecting your cash on time.

3. Make getting paid easy!

Give multiple payment options and make payment as convenient as possible so there can be no excuses. Online payment options are increasingly popular in most industries.

4. Offer discounts for quick payments

This lets the customer know that you value getting your cash on time and offers an incentive for them to pay you fast.

5. Stay in touch with customers (especially regarding the state of their business)

Business conditions are always changing. Hopefully, things improve… but some customers will encounter difficulties which compromise their ability to pay you. Early warnings help you take appropriate action, but this requires you to stay in touch with customers.

6. Prioritise customers with large AR balances

Your Accounts Receivable process should prioritise customers where returns will be greatest. That doesn’t mean you neglect the others… but recovering a large debt will have the biggest impact on cash AND increase team morale!

Success in Accounts Receivable management comes from building systems and implementing them consistently. That’s better than waiting for the AR balance to spiral out of control… and then trying to fix things. A few small steps can make a big difference to cash… so why not get started?

Need to forecast and improve your cash flow?

Do you never have enough money for wages or BAS payments? Are you always wondering where your profits went? It’s no secret that failure rates among Australian small business is high and about half of corporate insolvencies are the result of inadequate cash flow or high cash use and trading losses. The professionals at Notch Above Bookkeeping can assist with cash flow forecasting for your business. We will help you understand the cash flow requirements of your business. Contact our Xero Certified Bookkeepers Australia-wide on 1300 015 130.

cash in hand

Another $2.5M in grants for QLD small businesses

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Business Boost Grants Program Queensland

Key points

  • Business Boost grants of up to $20,000 to help Queensland businesses are up for grabs
  • $2.5 million will be available in this round
  • For more information go to www.business.qld.gov.au/businessboost
  • Applications close 12 September 2023.

The Business Boost grants program provides support to businesses to improve their efficiency and productivity through organisational development.

The grants can be used for activities that will create growth, such as strategic business planning, design and implementation of sophisticated cloud platforms and online management systems, and, planning and systems for staff management and development.

The Business Boost Grants Guidelines have been updated for this round and are available online now and businesses will be able to register their interest from 9am on 6 September 2023 until 5pm on Friday 12 September 2023.

Business Boost Grants are a pillar of the Queensland Government’s Big Plan for Small Business Strategy 2021-23. Business Boost grants have already helped 379 businesses which have shared in more than $4.7 million.

Notch Above Bookkeeping are Xero business bookkeepers and Certified Xero Platinum Partners Australia-wide, specialising in cloud bookkeeping setup, training and ongoing support. Contact us on 1300 015 130.

Source: https://www.business.qld.gov.au/starting-business/advice-support/grants/business-boost

tradie working on a deck

Project Trust Accounts for QLD Tradies

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Security of payment for tradies

Extension provided for smaller contracts

Key points

  • Nearly $10 billion is now protected for tradies under Project Trust Accounts
  • Qld Government extending commencement date for eligible contracts for up to two years – between $3 and $10 million to 1 March 2025, and over $1 million to 1 October 2025.

The Queensland Government has announced an extension of the commencement date for eligible contracts under the Project Trust Accounts (PTA) framework, providing further security of payment for tradies.

The extension allows for eligible contracts between $3 and $10 million to commence by 1 March 2025, and contracts over $1 million to commence by 1 October 2025.

The government is committed to leading the nation in the security of payment frameworks, including Minimum Financial Requirements, Retention Trust Accounts, and PTAs, which all aim to strengthen payment security for tradies and ensure safe workplaces and quality construction.

In recognition of the challenges faced by smaller builders in complying with the PTA framework, the government has formed a Steering Committee to work with software providers to develop a suitable solution for compliance.

More information about PTAs

A Project Trust Account (PTA) is an account through which project payments are received and paid. A PTA is needed for all eligible construction contracts in Queensland. A separate PTA is required for each eligible contract.

Typically, a PTA is:

  • paid into by the project owner or developer
  • managed by the head contractor
  • the account from which all subcontractors are paid
  • the account from which the head contractor pays themselves.

All other protections, including payment terms, reporting, and financial obligations (including existing Project Trust Account thresholds), will continue to require compliance and will be enforced by the building regulator.

Source: QLD Government