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Top finance tips for import and export operations

Blog By Duncan Khoury – 27 August 2021

There’s no doubt that the import and export industry is in a time of significant flux

Prior to the pandemic, Australia generated exports of nearly $195 billion per year. With imports of around $187 billion per year, this meant the country had a positive trade balance of approximately $8 billion.

As the pandemic continues to run its course, fluctuating periods of lockdown and restrictions around the world continue to disrupt the import and export industry in Australia. Add our general over-reliance on China and increased domestic spending on lockdown lifestyle items, and it becomes clear there’s never been a more important time to ensure you’re on top of your business finances.

We take a look at the main financial challenges facing import and export operations, as well as our top tips on how to better manage them.

Challenge: Unreliable timelines

While there’s always an element of unpredictability in managing global supply chains, the pandemic has added a new dimension. Sudden lockdowns and changing quarantine requirements can see orders delayed and timelines stretched, which often leads to late payments and pressure on cash flow. 

Spreading the risks of importing and exporting by diversifying suppliers is one way to manage this, but with it comes challenges from a financial management perspective. Multiple supplier orders, shipments, and invoicing adds pressure to processes while increasing the risk of error. 

Tip # 1 – Review processes and adopt powerful financial management software

Take a look at your financial processes. Do they work with the added administrative burden that comes with managing multiple suppliers? Does your reporting provide the information you require when you need it? Or does your lack of business process create more work for your team and cost the business money?

The right financial software can help you automate large parts of your financial processes including purchase orders, invoicing, reconciliations and more. It can also be used to provide powerful reporting with information at a glance to help you better manage your cash flow and supplier relationships. 

Challenge: New and unknown suppliers

Sudden changes in lockdowns and border closures leave import and export operations particularly vulnerable. You may be left dealing with company representatives in other cities or countries or needing to find completely new suppliers quickly in an effort to meet customer demand. The key downside is that your business faces added security risk by dealing with unknown and untested trading partners. It’s important to consider your suppliers carefully and mitigate any risk. 

Tip # 2 – Verify and secure 

We suggest thoroughly verifying any new trading partner while providing a secure transaction environment that helps to keep your data safe. The Octet Supply Chain Platform helps you do this by vetting new suppliers against global security standards and reducing risk by securing the transaction, keeping your data safe via anti-fraud technology.

Challenge: Currency fluctuations

Currency fluctuations are to be expected when working in the import and export industry. But in times of economic uncertainty, exposure to foreign exchange risk increases as does the potential to impact your bottom line. 

Tip # 3 – Lock in your rates

Locking in exchange rates becomes a key tactic in protecting your bottom line. Forward contracts can help by enabling a business to secure a fixed exchange rate for a point in the future. You can also simply take advantage of competitive, real-time ‘spot’ foreign exchange rates. With OctetPay, you get access to these options and the ability to bring your own funding source to any transaction, helping you capitalise on rates no matter where they move.

Challenge: Restricted cash flow 

Delays in shipping, extended quarantine times, and delayed payments can have a considerable impact on your cash flow. This can influence your ability to negotiate better payment terms, take advantage of discounts or leverage new opportunities to create a competitive advantage. 

Tip # 4 – Set-up flexible finance

Diversifying your finance options can give you the flexibility you need to manage these exact challenges. Our Trade Finance solution can help you pay suppliers upfront, secure reduced costs via potential early payment discounts, and take advantage of unexpected opportunities when they arise. 

Safeguard your operations

While the risks of importing and exporting are certainly heightened currently, the right financial management and tools can help your business survive – and even thrive – through change. Our finance options suit a range of import and export industries, including:

Interested in learning more about the most innovative working capital solutions available when importing and exporting? Get in touch today to discover what options might best suit 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.