Paul Lyons – a partner from Tasmanian-based practice WLF Accounting & Advisory – has seen huge growth in clients using the cloud to tap into growth markets for their products.
The traditional business model focuses on bricks and mortar, with customers visiting the store to buy goods. But with the advent of the digital economy, many small businesses have moved to exporting their goods and services via online platforms.
The most recent data available from the Xero Small Business Insights suggests a surge in exports for Tasmania. In December, the total value of exports by small businesses (as measured by foreign currency transactions) rose 6.8 percent, the most in seven months. At WLF, we’ve seen a huge growth in clients using the cloud to make inroads into new markets for their products.
The growing Asian middle class, for example, crave top-quality Australian produce. Tasmania has a unique clean and green image with an outstanding agricultural sector. We’re seeing client exports grow, both in businesses that traditionally export as well in news ectors which previously – due to freight and technological issues – made it prohibitive.
Our clients can now pick cherries off the tree one day and deliver them to the table of a top Hong Kong restaurant the next. Or fresh Tasmanian milk can be sold for $20 a litre in an overseas grocery store.
Resources aiding the growth
While exporting can increase the complexity of running a small business, we advise our clients that it can also help to de-risk their business because it reduces their dependence on the domestic market. Xero’s multi-currency functionality lets businesses create foreign currency bills, invoices, quotes, purchase orders and credit notes. It can also produce financial reports in over 160 different denominations.
We use the multi-currency feature a lot for our international clients. As an example, we provide a large client based in Norway with monthly financials, including accounts payable and receivable reports converted to Norwegian krone, at the click of a button. Xero also produces a foreign currency gains and losses report showing total currency exposure. Which means no more complex reconciliations and conversions. The CEO of the Norwegian company loves it so much that he wishes his domestic accounting program offered it.
Thanks to AusTrade, Australian small businesses can access knowledge, support and resources to get ready to export their goods. There are lots of handy guides and tools that help businesses to navigate different areas, such as:
- Getting ready for export
- Creating an export strategy
- Carrying out market research
- Marketing your exports
- Pricing your exports
- Dealing with freight and logistics
Taking on importing and exporting may not be for every small business, but accountants with expertise can help business owners formulate an export plan, understand the available resources and technology, and assess the pros and cons of taking their business international.