We will always have a need for a manufacturing industry in Australia, to some extent. For as long as we need consumer goods and raw materials for construction, we will always rely on manufacturing companies to provide them for us. But in recent years, we've begun to see the industry tighten up, as profits are smaller and it's more difficult for companies to stay competitive.
"Running a viable business in 2016 requires being smart about one's finances."
This doesn't mean it's time for manufacturers to admit defeat. Instead, it just means that running a viable business in 2016 requires being smart about one's finances, both present and future. With a clear vision and solid accounting practices, there's still a path forward.
Manufacturing is a tight, competitive space
Manufacturing has always been a bedrock of the economy, but it's become less so domestically for various reasons – for example, outsourcing has moved jobs to other countries with lower wages. If you've worked in the manufacturing software space for a few years, you've no doubt observed this trend.
Research from the Parliament of Australia showed that four decades ago, the total share of the nation's gross domestic product covered by manufacturing was around 14 per cent; as of 2014, it was less than half that, at about 6.5. Profitability has similarly seen a marked decrease in recent decades.
This doesn't mean it's impossible for manufacturers to be successful today, but it does demand that companies be smart about business development and keep costs as lean as possible.
Be more careful with accounting than ever
Having a smart business strategy is largely a matter of accounting. You must have clear and accurate information on your finances and all of your assets in order to make intelligent long-term decisions.
In manufacturing specifically, a big part of this is inventory tracking. What materials do you have too little of, or too much? How are the costs of keeping your inventory stocked changing over time? Are you bringing in enough revenues to cover expenses?
When times are tough economically, there's little room for error with answering these questions. Make sure you have data that is precise and up to date.
How Jiwa Financials can play a role
If you're looking to grow your business despite working in a competitive marketplace, you have your work cut out for you, but there is good news – Jiwa Financials can help you do it. Jiwa Financials is Australian-owned and operated and has helped companies with accounting and development for over a decade.
With Jiwa, you're assured of exceptional software performance and data integrity. It's impossible to move your business forward without good, reliable information, and that's exactly what you'll get.
