Australia: Popular Place for Cloud Computing

Not many countries have grasped the advantages and benefits that cloud computing offers like Australia.

In the new survey conducted by Forrester on behalf of VMware, Australia’s fondness for cloud computing, the accounting software for business, has once again been emphasized. This was according to the report of itWire.

Cloud computing has been perceived as a strategic business investment by some 47 per cent of businesses in Australia. This is in comparison to other markets as its number one benefit is cost reduction.

Compared to over a year ago, there has been an increase of seven percent in small businesses in Australia that already use the accounting software for business. This is shown with 67 per cent of them using cloud computing.


"What is clear from the survey is that Australian companies are ahead of the game when it comes to cloud computing," says Duncan Bennet, Managing Director of VMware Australia and New Zealand.

Solid financial results have been enjoyed by VMware in the third quarter of this year.

Aussie Cities Among The Priciest In The World

According to a global survey, Sydney, Melbourne, Perth, and Brisbane have gained the newest reputation of being among the most expensive cities in the world because of its strong Aussie dollar.

The Economist Intelligence Unit’s Worldwide Cost of Living survey found that it is now cheaper living in London, Hong Kong, Vienna, Rome, Berlin, and Beijing compared to most Australian cities.

From ranking 32nd in the last two years, Sydney is now the 6th priciest city in the world. Melbourne, on the other hand, moved from 38th place to 7th this year.

Ranking 13th and 14th, respectively, are Perth and Brisbane. This data show that the two cities are almost 25 per cent more expensive than New York.

The strengthening value of the Aussie dollar is partly the culprit of the skyrocketing costs of living of Australia, according to Jon Copestake who authored the survey.

In November 2010, the Australian dollar reached parity with the US dollar. And on May 3, it even hit a peak 110.11 US cents which was the highest since 1983. Today, the Aussie dollar is closing in at 107 US cents.

“Rising domestic prices, partly due to rising oil and commodity prices, have been compounded by the strength of the Australian dollar, which achieved parity with the US dollar earlier this year, compared to being worth around half that much 10 years ago,” said Copestake.

The survey further revealed that Australian cities are also among the most expensive cities for business trips.

Accommodation, meals, taxis, drinks, and a newspaper in Melbourne would cost one around US$760 a day. While in Sydney, it costs around US$627.

“Australia has long been an attractive destination, with Melbourne and Sydney becoming international cities in their own right. Whether the spiralling relative cost of living will dampen this appeal remains to be seen,” he added.

The cities of Tokyo, Osaka, and Oslo were named the three most expensive cities in the world by the survey. On the other hand, Mumbai, Tunis, and Karachi are the cheapest among the countries that were surveyed. There was a total of 140 countries included in the survey.

The Economist Intelligence Unit is UK-based and provides economic and business research, as well as forecasting and analysis.

Source: The Sydney Morning Herald »

Cash Flow Problems of Small Businesses in Australia

Research has shown that the biggest challenge of small businesses today is cash flow. Delinquent accounts increased by 20 per cent in the March quarter with payments over 90 days late.

This problem has been caused by customers delaying payments. The situation is compounded as the government incentives of 2009-2010 have already ended before the economy has reached the level required by small businesses to survive. To add to the problem, the natural disasters in Queensland and Victoria had adverse effects on small businesses in parts of Australia.

On a national perspective, the difficulty of small businesses is not reflected as it is heavily influenced by the mining industry’s momentum.

Here are possible solutions for small business owners.

Mark O’Donoghue, Finlease Finance Broker, said that it would help to talk to a specialist business broker. The advice of a specialist is free and offers practical solutions.

“One readymade solution is debtor finance. This is a facility that can fund your receivables which you may not otherwise be able to recoup from your customers for weeks or months. In other words, the finance pays your bills so that you can meet your ongoing commitments to keep running your business efficiently. You’ll receive up to 80 percent of your invoice, eliminate the immediate hassle of collecting payments and will be able to fund current operations without incurring further debt,” he added.

Another practical solution is to encourage customers to pay in advance and then give them discounts when they do so. And for those customers who are the worst payers offering them a big discount to pay promptly can help ease the situation.

Source: DynamicBusiness.com.au »

Small Businesses Now More Willing To Borrow

There is more willingness on the part of small businesses to borrow. This is due to increased competition amongst the banks. A significant boost to the big four’s loan books may not show for a few months yet.

Businesses of all sizes have shown their willingness to borrow over a 12-month horizon since November 2010. However, research firm, DBM consultants reported on Tuesday that expectations declined in April for all except for the smallest micro-sized enterprises.

These micro-sized enterprises represent 89 per cent of all Australian businesses of which 39 per cent of them do not have loans. Furthermore, they have annual leftovers of less than $1 million. Those with annual turnovers of around $200,000 are expecting to change their debt levels over the next 12 months.

Sentiment was assessed and found to be strongest amongst miners, insurers, and other financial services firms. The weakest, on the other hand, is among those in retail, agriculture, tourism and construction sectors.

DBM has been commissioned by the four banks to conduct surveys. Among the top concerns listed by all businesses are rising interest rates and business costs.

John Hinchy, DBM’s Chief Statistician, describes the mismatch between borrowing expectations and business sentiment for micro-sized businesses as a conundrum.

However, Colin Whitehead of Fat Prophet says this observation is probably because businesses want to borrow in order to plug their cash flow problems.

He also stated that the competition among lenders to win business loans is driving these small businesses to increase their borrowings. “The banks are competing more actively in that space, therefore they are likely to improve the terms,” said Whitehead.

The top end of town only represents 0.3 per cent of Australian businesses, but it covers about 40 per cent of all Australian borrowings. Meanwhile, small businesses only account for 15 per cent of all Australian borrowings.

New Small Business Tribunal Created To Resolve Disputes

In an effort to speed up resolutions to small business disputes and to minimize costs incurred by small businesses involved, a new national small business tribunal has been created by the Australian government.

Nick Sherry, Federal Minister for Small Business, was the one who proposed this tribunal option in an options paper that was released.

The following key ideas are contained in the paper:

1. A National Information and Referral Service - this includes a website and a telephone line that directs small businesses to other services in their area.

2. A National Dispute Resolution Service - will provide referrals and information and offer low-cost mediation.

3. A National Small Business Tribunal - will deal with small business disputes backed by Commonwealth legislation.

4. A Small Business Advocate - would independently represent the interests of small businesses to the Australian government.

According to Sherry, the small business tribunal will serve as a “one-stop shop” for disputes and will be backed up by commonwealth legislation.

It has been found out that one in five small businesses, or about 20 per cent of Australia’s 2 million small businesses, had been involved in a dispute with another small business in the past five years according to the survey conducted by the Department of Innovation, Industry, Science and Research (DIISR). Around 2/3 of these cases were payment-related while around 9 per cent were serious.

It was also further found out that many small businesses did not know where to go with the disputes. However, if they knew, they also hesitated due to financial concerns.

"My aim is to bring about a national business-to-business disputes resolution process that is accessible, prompt and as low cost as possible for small businesses," Sherry said.

He added that the aim of the tribunal is to keep disputes out of court especially those small business disputes that only require low-cost and speedy services.

News sources: Smart Company | Sydney Morning Herald | Herald Sun | Queensland Business Review

ACCI says Small Business Confidence Stays Weak

A business lobby group says that the confidence in small businesses has remained weak. This is primarily because of the high Australian dollar and the likelihood that interest rates will be raised.

The index for business conditions was 43.8 points in the March quarter which is only higher by 0.1 compared to the previous period. This was revealed in the small business survey by the Australian Chamber of Commerce and Industry or ACCI. Figures below 50 indicate a contraction in the economic conditions of small businesses.

They had expected a better performance of 49.3 index points.

"Over the March quarter, most small business growth indicators and confidence have continued their declining trend amid the strong Australian dollar, the prospect of rising interest rates and taxes and continued global uncertainties," said Greg Evans in a statement on Tuesday. Evans is the ACCI Director of Economics and Industry Policy.

Furthermore, he said that "The survey also highlights that small business performance continued to fall significantly behind its larger counterparts."

Only wage growth and non-wage labor costs rated above 50 points while 6 of ten components in the survey fell during the quarter.

According to Mr. Evans, the federal budget did not alleviate the costs of doing business in the near term and that disappointed the sector.

"Instead, some measures in the budget will negatively affect their sales and increase taxes payable in certain circumstances. The possibility of further increases in interest rates over the next few months, impending higher energy costs and the possibility of across the board minimum wage increases will further impact on small business profitability and viability," he said.

Most indicators of the survey indicate conditions will be better in the June quarter.

News Source: Sydney Morning Herald »