While supply chain challenges do affect some businesses more than others, supply chain management always plays a critical role in the smooth operation of any organisation. This is particularly true in geographically remote countries like New Zealand, where even common office and home supplies often need to take transoceanic voyages to reach various isolated domestic markets.

New Zealand’s low population complicates things even more by keeping demand for most goods low, making it a less prioritised market than many others. All told, these challenges mean that New Zealand businesses often face higher shipping costs, longer lead times, and greater exposure to supply chain disruptions.

However, with more effective supply chain management, businesses can overcome these hurdles. Monitoring costs, exploring financing options, and stoking the right supplier relationships are the most basic challenges but, as a business grows, optimising the costs associated with these becomes just as important.

Given the complex financial aspects of modern supply chains, your accountant should be a partner in sorting out these issues. However, before you can fully reap their insights, you need to know what to ask. Asking the right questions will enable you to fill in gaps in your knowledge and make it that much easier to develop a cost-effective supply chain.

If you’re based in South Island, call the accountants Dunedin businesses trust and ask them these questions:

1) What Are Our Current Supply Chain Costs? How Do They Compare with Industry Benchmarks?

Knowing your cost structure and how it relates to your competitors’ numbers makes it that much easier to spot inefficiencies and opportunities for savings. If your accountant has experience with your industry or access to subject matter experts, they may also provide benchmarking data to help you evaluate your financial competitiveness relative to the rest of your industry.

2) How Can We Better Manage Cash Flow within Our Supply Chain?

Cash flow is life for any business. Of the things that impact your cash flow, supply acquisitions are likely to play a significant role, regardless of your line of work. Depending on your specific cash flow issues, your accountant should be able to recommend strategies like negotiation and financing to keep your supply chain costs down.

3) What Financing Options Are Available to Support Our Supply Chain Operations?

Speaking of financing, your accountant can help you explore a full breadth of financing solutions to address cash flow gaps. Such options may include trade finance, government grants, and lines of credit, to name a few.

4) How Do Exchange Rate Fluctuations Impact Our Supply Chain Finances?

New Zealand has a robust economy, but it does not manufacture everything that businesses need. For that reason alone, exchange rate fluctuations often have a significant impact on costs and profits for local businesses. Your accountant may suggest hedging strategies or opening certain foreign currency accounts to help mitigate these risks.

5) Are We Taking Full Advantage of Tax Incentives Related to Our Supply Chain Activities?

Depending on your business, there may be existing tax benefits and deductions associated with import/export activities, R&D, or logistics improvements that you can use. An accounting firm with strong legal support should be able to help you identify and claim these opportunities across all the jurisdictions where your business operates.

6) What Are the Financial Risks in Our Current Supply Chain? How Can We Mitigate Them?

Supply chain risks can be quite multifaceted and difficult to keep track of. Geopolitics, supplier insolvency, and even weather can impact supplies and logistics, making it important to look at the bigger picture. Your accountant can assist in helping you manage these risks and more through better processes and thoughtfully made contingency plans.

7) How Can We Optimise Our Inventory Levels?

With the complications of international logistics and sourcing, it can often make sense to hold more inventory than you think you need. However, holding too much inventory ties up your capital and increases your warehousing costs, requiring you to find the optimal balance. An experienced accountant can look at your sales and production data and recommend inventory thresholds that minimise your risks.

8) How Efficient Are Our Supplier Payment Terms? Can We Renegotiate?

Supplier loyalty often (but not always) leads to mutually beneficial relationships. But what do these relationships look like? If they know your industry, your accountant should be able to tell you. Even better, your accountant can review existing supplier relationships and, if necessary, negotiate more favourable terms on your behalf.

9) What Technology Do We Need to Improve Our Supply Chain Financial Management?

Alongside your IT team and other tech stakeholders, your accountant can recommend tools that seamlessly integrate with your financial systems. With proper integration, modern tools should help reduce time-consuming manual labour in your accounting and bookkeeping, improving efficiency and transparency. In turn, these benefits should help you take on challenges like audits and supply chain process optimisations with confidence.

10) What Are the Potential Cost Implications of Expanding Our Supply Chain Operations?

Lastly, should you decide to expand your operations, your accountant can conduct a cost-benefit analysis to support decision-making. With their help, you can avoid many of the supply challenges associated with business expansions.

Gain Financial Clarity for Your Upcoming Supply Chain Successes

A comprehensive understanding of your supply chain finances will almost certainly mean better decision-making down the line. You’ll easily spot areas for improvement, red flags, and incoming opportunities far off on the horizon, securing a stable inventory for your growing business. Schedule a meeting with your accountant today to get the answers you need to improve your supply chain.