Why Airwallex is the perfect financial machine for the manufacturing industry

Isabelle Comber5 minutes
Technology
Why Airwallex is the perfect financial machine for the manufacturing industry
In this article

In the manufacturing industry, especially for businesses with an international footprint, the complexities of financial management, cost control and supply chain optimisation can create barriers to growth.

As local and global markets keep shifting, Australian manufacturing businesses have hit some serious speed bumps that are testing the skills of even the most experienced CFOs and finance teams.

Fortunately, specialised solutions have emerged as a game-changer for manufacturers looking to streamline operations, safeguard margins and keep the growth train securely on track. 

In this article, we look at how smart payment solutions, simplified global bank account facilities and streamlined supplier management tools can transform the financial operations of manufacturing businesses. 

The current state of play for manufacturers

Developments in automation, 4IR, IIoT and smart factories are truly revolutionising the manufacturing industry, driving it toward rapid modernisation. These advanced methods and technologies provide a competitive advantage through “smart specialisation” rather than mass or cheaper production and allow businesses to compete in more lucrative global markets and supply networks.

It's an exciting era of transformation, but not without challenges. Recent years have brought significant strains – with the pandemic to supply chain woes, labour shortages and rising interest rates – hitting harder than in many other sectors.

While many businesses are feeling the squeeze, the good news is that momentum seems to be holding. Manufacturing has always been an important piece of the country's “economic pie”, and it still plays a big part in employment, exports, and economic growth. 

The future is especially bright in areas where natural talent gives Aussies a competitive advantage – like agriculture, aquaculture, mining, medical research, renewable energy and tourism. These create profitable downstream opportunities for related manufacturing activities like food and metal processing, medical device and outdoor equipment manufacture and marine and energy tech. 

Another factor is how the pandemic highlighted Australia's overreliance on imports. While local production costs have traditionally been high, this has given us a push to re-shore a range of manufacturing activities and create more jobs locally.

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Five financial pain points for manufacturing businesses

Managing finances domestically and across borders, making and receiving timely payments and maintaining visibility over financial transactions come with their own specific set of challenges in the manufacturing sector. 

The industry is innovating fast, and legacy financial solutions are struggling to keep up. Services from the big banks aren’t necessarily the best fit for the agile needs of modern manufacturing, which can contribute to common challenges.

Pain points we frequently hear from the industry include;

  1. Managing costs and cash flow. With the cost of raw materials, equipment components, energy and labour constantly on the rise, finance teams in manufacturing must continuously find ways to manage and reduce expenses, including foreign exchange costs and transaction fees. This calls for a delicate balance to avoid compromising product quality or workforce morale.

  2. Dealing with complex supply chains. Manufacturers typically deal with intricate (often global) supply chains which involve paying suppliers in different countries, often in local currencies, while also managing revenue from global customers. Effectively managing currency fluctuations, payment terms negotiation and cross-border transactions is no easy task.

  3. Planning for capital expenditure and investment. To stay competitive, manufacturers must invest heavily in production plants, machinery and components. With multiple suppliers and sources in the mix, failing to keep business costs in check and make payments on time can delay production and directly impact the bottom line.

  4. Handling commodity price volatility. Relying on commodities as inputs for production makes manufacturers particularly susceptible to fluctuations in their pricing. When paying overseas suppliers, the cost of transacting can add up as prices rise and significantly impact profit margins. 

  5. Adapting financial terms to meet local needs. Global manufacturing companies often need to customise products for different markets, and this also applies to financial operations, for example, offering payment terms or options that are preferred in specific markets. Taking local customisation and compliance into account takes time and calls for a high degree of financial flexibility.

How Airwallex’s financial solutions can benefit manufacturers

For Australian manufacturing businesses, success depends on how well the industry can innovate and zero-in on high-value processes and products that truly make a difference.

When it comes to doubling down on digital, though, it's not just about tech used on the factory floor. It's also crucial to think outside the box in terms of managing your financial operations. Innovation empowers finance leaders in manufacturing to face challenges head on, building greater resilience, efficiency and competitiveness on a global scale.

This is where Airwallex comes in. With its comprehensive solutions for bank accounts, foreign exchange, transfers, and bill payments, it’s perfectly tailored to help Australian manufacturers meet these challenges and keep their operations running smoothly at every level.

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Move funds around easily and save on global operations

Airwallex revolutionises the way businesses move money around the globe, offering a seamless and efficient solution that sidesteps the hassles associated with setting up local currency accounts worldwide. 

With Global Accounts, you can open both domestic and foreign accounts in more than 60 countries in minutes, enabling you to easily make and receive payments in different currencies. Not only is it convenient, but our market-leading FX and Transfers cut out costly conversion and transaction fees, ensuring that you're not bleeding money through unnecessary bank charges. 

There are no account opening fees, monthly maintenance charges, or minimum transaction requirements, making it a truly accessible and budget-friendly option for cost-conscious manufacturing businesses with a close eye on their margins.

Security is a priority and end-to-end encryption means that your money is always safe and available when you need it.

Pay suppliers efficiently and get better visibility over your outgoings

Manufacturers know all too well that the key to a seamless operation lies in maintaining strong relationships with suppliers and vendors. Success hinges on efficient procurement and payment processes that keep the wheels of production turning without any hiccups.

While bills and invoices from different companies (and countries) can pose a challenge, Bill Pay has been specifically designed to reduce the friction and free up finance teams from manual, time-consuming bill payments by automating accounts payable from one place.

You can easily pay vendors across the globe and reconcile faster through integrations with all the leading accounting software platforms (including Xero, Netsuite and Quickbooks).

Not only do custom approval workflows and notifications give you greater visibility over your expenditure, but you can quickly convert balances in your account to different currencies to give you a comprehensive overview of your international transactions. In just a few clicks, you have the insight you need to make more informed decisions.

Get started with a global account

Start transforming your banking and payments today by signing up for your free borderless Airwallex account. You can also contact our team to learn more about how we can tailor our solutions to suit you best.

Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. It is important for you to read the Product Disclosure Statement (PDS) for the Direct Services, which is available here.

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Isabelle Comber
Business Finance Writer

Izzy is a business finance writer for Airwallex. She specialises in thought leadership that empowers businesses to grow without boundaries.

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This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) it is important for you to read the Product Disclosure Statement (PDS) for the Direct Services, which is available here. If you are a customer of Airwallex Capital Pty Ltd (Authorised Rep No. 001304702), it is important for you to read the Product Disclosure Statement (PDS) for Airwallex Yield, which will be made available to you at the time of onboarding. Airwallex Yield is brought to you by Airwallex Capital Pty Ltd (Authorised Rep No. 001304702). All investments carry risk. *Target returns are after fees and accurate and updated as at 9 April, 2024 (AEDT).

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