Shift partners with Nowek Coffee to offer payments solutions

Papua New Guinean coffee producer Nowek Coffee has found the opportunity to make Australia the main market for its premium and specialty coffee in 2023.

Terry Shelley, Commercial and Exports Director at Nowek Coffee, says while the company maintains a strong level of supply through various methods, it needed a finance option that would provide the certainty of cashflow, while ensuring customers had the payment flexibility to manage their own finances.

“As you can imagine for a producer that’s shipping and warehousing our own coffee, cashflow is something we need to keep a constant focus on. Roasters naturally want flexible payment terms, but at the same time keeping the mill operating can be very cash intensive during harvest,” Terry says.

“Once you consider time for production, quality control and export, plus 30-day payment terms that most roasters require, we can be carrying costs for the stock we produce for 90 days or more, so cashflow is a balancing act.”

Shift, a provider of credit and payment platforms to Australian businesses, has joined forces with Nowek Coffee to alleviate these issues. Terry says its payment platform Shift Trade has enabled a seamless payments experience for its customers.

“We invoice the customer as we normally would but get paid straight away by Shift, while the customer can choose to accept our standard payment term or extend the term for a period that suits them,” he says.

A key focus for Nowek Coffee is currently making strong, direct connections with Australian-based roasters and providing them with access to small volumes of coffee straight from the Nowek mill.

“Shift Trade caught our attention during a period when we were experiencing extended port clearance delays, which was dragging out delivery, and therefore payment, times. Once we looked into it, we could see that Shift Trade made sense for us,” says Terry.

“We can now offer flexible payment terms to our customers while having the confidence that we’ll receive payment immediately after delivery, which takes away the burden of traditional trade terms.”

Terry says the company has warehousing facilities in Queensland, with expansion planned across Victoria and New South Wales this year.

“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,” he says.

According to the Shift Business Index from December 2022, cafés spend on average 55 per cent of their expenses on supplier costs, while looking to grow, find staff and manage their businesses.

Paul Barker, Shift’s Merchant Director, says he’s seeing a desire from businesses for streamlining financial and back-end processes while having trade terms that work for them rather than against them.

“During 2023 we expect to see an increase in demand for platforms and products that make suppliers easier to do business with. Shift Trade is a great example of this, allowing suppliers to save time and create a smoother sales process with a simple-to-implement solution for administering their customer trade accounts,” Paul says.

“It streamlines trade by automating customer onboarding and credit assessment, simplifies trade account receivables and addresses credit risk with guaranteed invoice payments.”

Paul adds that the cashflow cycles of customers and their suppliers rarely match up, creating another hurdle that can be overcome with smart use of technology that can cut through paperwork.

“We see this with small business suppliers whose invoices are paid on average 6.9 days late, according to the Xero Small Business Insights from November 2022,” he says.

“The right embedded financial solutions can meet this issue head-on, enabling suppliers and their customers to continuously trade through any cash flow gap whilst also being able to take advantage of bulk or investment buys when they arise.”

When looking at business payment solutions, Paul says other suppliers like Nowek Coffee need to choose providers that work for the customer through an easy sign- up process and for the suppliers by working into their business processes.

“The idea is that both parties can get on board easily, the transactions are simple, and the platform streamlines processes, so the merchant and their customers can get on with business. Once set up, it encourages repeat business and takes away the stress of unpaid invoices,” says Paul.