Dan Hillier | 29 Jun 2020
Small businesses are nervously counting down the days until the federal government's $70 billion JobKeeper wage subsidy program ends on September 27th. Other support measures such as rent deferral will expire around the same time.
The ABS has reported that 72% of businesses have lost revenue due to the coronavirus crisis, while nearly the same number (73%) have accessed support including wage subsidies and deferred loan repayments, or have renegotiated rent to get by. Almost a million employers have accessed JobKeeper, which gives eligible workers $1,500 each per fortnight.
Business owners know they need to get on the front foot to survive - making sure their cash flow and revenue streams are strong, their staffing needs are met, and that they'll be able to meet their tax obligations - but there's only so much that can be done in a down economy. While some sectors are showing signs of recovery, it's possible that September 27th will mark the start of a wave of small business insolvencies.
If you are a procurement professional in the public or semi-public sector, there are three actions you can take to proactively assist small businesses stand on their own two feet by September 27th.
Sourcing from local suppliers is by far the most impactful way to strengthen the local economy against the effects of the COVID-19 economic hit. Spending with local suppliers helps boost local employment, and keeps money in the community which is then likely to be spent locally.
If you are in local government and there are no suitable suppliers in your area, widen the search to neighbouring council areas rather than defaulting to a large city-based supplier. If you are in state government, a platform like VendorPanel can help you identify in-state suppliers in dozens of categories, and track your buyers' engagement with them. Local sourcing can benefit the buying organisation with shorter supply chains, more responsive suppliers, and better supplier relationships. And our research has shown that buying local need not cost more and can actually save you up to 10%.
Providing staff with a view of their local supplier market and tools to engage suppliers in a fair quotation process will help drive your procurement spend to local business. Daniel Parker, Purchasing Coordinator at Richmond Valley Council in NSW has been using VendorPanel Marketplace to find and engage local suppliers for many years. He says “At the stage of selecting suppliers there is a map that shows the closest in a select category. Staff love using it and our local spend has increased as a result.”
Late payments may not seem like a big deal for large organisations, but even a short delay can be devastating for small businesses struggling with cash flow. Paying late can severely damage relationships with suppliers.
If your organisation regularly pays late, identify what is causing the problem, then make it a priority to get it fixed before September 27th. Causes may include:
Talk to VendorPanel about integrating your procurement platform with your finance system. This can automate processes, reducing admin and errors, with many benefits for you, as well as for suppliers.
We’re all in this together. This means that the local suppliers and contractors that you work with shouldn’t feel that they’re unsupported or dealing with the COVID-19 crisis alone. There’s plenty of time between now and September 27th to reach out to key suppliers, listen to their concerns, then determine how you can help them over the coming months. Don’t underestimate the power of simply listening, or the importance of maintaining a healthy, resilient local supplier base.
Hundreds of government and commercial organisations use VendorPanel Marketplace to find local suppliers and invite them to quote on work. Registration is easy for suppliers and, once completed, their business profiles are visible to anyone searching for vendors in their category of work and region of service.
VendorPanel is an award-winning Source-to-Contract solution that makes it easy for staff to use the right suppliers, follow good process and to drive positive procurement outcomes. It brings all of your suppliers and associated data into one secure and configurable platform, with integrations that support real-time collaboration with people, process and systems across the enterprise.
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