Shift is helping suppliers manage their cashflow and administrative tasks with the Shift Trade platform, a digital payment tool eradicating common pain points across the supply chain.
According to Paul Barker, Merchant Director at Shift, cashflow holes typically arise at each stage of the supply chain, from producer to trader, roaster to café.
Late payments can stifle growth for roasters, throwing their capital management and growth plans into disarray. And for many cafés and hospitality venues, large volumes of invoices to pay – many with short terms – can place strain on their books and create cashflow gaps.
“By the time a producer takes an order, typically asking a roaster for an initial 50 per cent deposit and the other 50 per cent when the beans hit the water, for that order to get to the roaster then to the café, could be 90 days or longer,” Paul says.
What Shift does, an Australian company providing trade, credit, and payment solutions, is allow suppliers to offer payment terms to their customers, while ensuring they get paid the next business day after each purchase.
“For the producer, it means they maintain cashflow by getting paid up front and they’re also expanding their market because those roasters who don’t have the cash to pay up front can use our Shift Trade platform to get 30- or 60-day terms and pay for the beans over time,” Paul says.
“The roaster then issues the café an invoice, which gets paid from day one [thanks to Shift], and the café typically gets 14 or 30 days to pay us back for the beans.”
Late payments disappear thanks to payment extensions. This gives cafés and hospitality venues payment terms that ease pressure on their cashflow, while giving suppliers certainty of payment.
“If you realise your bean payment is due in four days’ time, for instance, we allow the customer – such as the roaster or café – to extend the payment for a week or a month, for example, for a small, fixed fee. The due date simply moves to whenever they’re comfortable to pay,” Paul says.
Terry Shelley, a Papua New Guinean coffee producer at Nowek Coffee, offers flexible payment terms to customers with the reassurance the company will be paid immediately, and can plan capital spend accordingly.
“Shift Trade helped us overcome a significant hurdle to sending more coffee directly to our Australian-based warehouse and expand into more states and territories,” Terry says.
Shift Business Index data shows that cafés spend more than half their expenses on supplier costs while trying to grow, find staff, and manage their business.
As such, the Shift Trade platform streamlines processes and reduces time-consuming administrative tasks, such as chasing invoices. Business owners have full visibility of their credit limits and can easily invite customers to register online.
“Previous accounts receivable staff ‘shift’ their role to a more proactive one as an accounts facilitator helping the business to grow rather than one based around chasing money and making phone calls. We solve pain points, burdens, and administrative chores to help staff focus on what matters most,” Paul says.
FoodByUs, one of Australia’s largest online wholesale food ordering platforms that connects restaurants and cafés with thousands of suppliers, also uses Shift Trade.
“Cashflow, administration and supplier management are three of the biggest challenges for any hospitality business,” says Ben Lipschitz, Co- Founder and CEO of FoodByUs. “By offering a payment solution within FoodByUs, our customers can address all three issues, and take away a lot of time spent on manually chasing payments and juggling bank balances so they can get on with their business.”
Since Shift was established in 2014, the company has built its customer base to include thousands of businesses across industries including construction, retail, supermarkets, petrol stations, and hospitality businesses.
“We’re solving cashflow problems up and down the supply chain. For the coffee industry in particular, it means producers can sell more, the roaster can buy more, and the cashflow cycles get matched. It’s a win win.”
Shift will exhibit at the Melbourne International Coffee Expo from 17 to 19 August.
For more information, visit link.shift.com.au/trade
This article appears in the August 2023 edition of BeanScene. Subscribe HERE.