The figures, compiled by Invoice2go using analysis of its 29,629 Australian business customers, revealed that the 2018–19 financial year was a disappointing year for many businesses.
Collectively, these firms had invoiced for 7.6 per cent less than they did in the previous financial year – equating to an average hit of $8,315.
According to Invoice2go, the slowing economy hit virtually every sector.
Perhaps unsurprisingly given the house price declines of the last two years in most metropolitan markets, property-related businesses were among the hardest hit.
Interior design businesses saw revenues slump by more than a fifth (22 per cent), with the average invoice amount falling from $123,975 to $96,809.
Finance, insurance, real estate and consulting firms saw a collective fall of 20 per cent, with their average invoice size shrinking from $102,353 to $81,937.
Other sectors to see double-digit percentage falls in the size of their invoices included veterinary and other pet services (down by 13 per cent); education, health and personal care services (also down by 13 per cent); and transportation and warehousing (with a 10 per cent fall).
The only bright spot was trades, with the plumbing and HVAC (heating, ventilation and air conditioning) sector posting a 3.8 per cent uptick for the year, as the average invoice size surged from $132,166 to $137,150.
Invoice2go CEO Greg Waldorf said the figures are a worrying sign for the health of the Australian economy.
“It’s hard to deny what are clear signs that point to a downturn, at the very least. And worse still, such figures are even indicative of a possible recession on the horizon,” he said.
A full breakdown of the sectors examined by Invoice2go for the last financial year is listed below (from best to worst performing):
- Plumbing and HVAC: Average invoice size of $137,150 (up by 3.8 per cent)
- Cleaning: Average invoice size of $67,309 (down by 0.9 of a percentage point)
- Retail trade: Average invoice size of $85,564 (down by 2.1 per cent)
- Other home and building maintenance (excluding cleaning and landscaping): Average invoice size of $88,714 (down by 2.6 per cent)
- Construction: Average invoice size of $131,596 (down by 2.7 per cent)
- Landscaping: Average invoice size of $71,046 (down by 2.9 per cent)
- Electrical: Average invoice size of $88,375 (down by 4.0 per cent)
- Arts, media and marketing: Average invoice size of $37,611 (down by 5.8 per cent)
- Tech services: Average invoice size of $67,780 (down by 6.5 per cent)
- Painting: Average invoice size of $116,049 (down by 8.1 per cent)
- Auto repair: Average invoice size of $140,517 (down by 8.8 per cent)
- Pool and spa: Average invoice size of $160,588 (down by 9.2 per cent)
- Accommodation, food and event services: Average invoice size of $67,644 (down by 9.9 per cent)
- Transportation and warehousing: Average invoice size of $103,541 (down by 10.0 per cent)
- Education, health and personal care: Average invoice size of $54,553 (down by 12.6 per cent)
- Veterinary and other pet services: Average invoice size of $123,249 (down by 13.3 per cent)
- Finance, insurance, real estate and consulting: Average invoice size of $81,937 (down by 19.9 per cent)
- Interior design: Average invoice size of $96,809 (down by 21.9 per cent)
Financial constraints causing marketing cut-backs
A slowdown is business revenues could help to explain findings from Intuit Australia, which suggests SMEs are deprioritising marketing due to financial constraints.
The accounting software provider commissioned Lightspeed Research to poll the owners of businesses with up to 100 employees. Of the 503 respondents, only a third (34 per cent) said they are making marketing a priority within their business.
That finding came despite 80 per cent believing that marketing is valuable in generating new leads and sales.
Intuit said that money was one of the major factors causing business owners to direct funds away from marketing.
“This is a classic trap for small businesses. While day-to-day operational demands can make finding the time and money to invest in marketing difficult, it’s hard to keep cash flow healthy and achieve your business’s potential without it,” country manager Natira Drayton said.
However, other SMEs appear to see little value in marketing spend. Aside from budgetary constraints and having higher priorities to direct funds, one of the top three reasons business owners gave for not prioritising marketing was that they are focused on word-of-mouth to attract new customers.
Nevertheless, almost half of the respondents (45 per cent) admitted they need support in marketing their business.
Not all doom and gloom, as local retail stars named
Separate figures compiled by point-of-sale software provider Vend in conjunction with the National Retail Association (NRA) painted a far rosier picture for at least some local retailers.
The collaboration examined 5,000 independent retailers to compile the inaugural Remarkable Retailers report, which suggested that independent retailers in Australia achieved an average transaction spend last financial year of $48.
That, said the report, equates to 18 per cent more than similar retailers in New Zealand generate, and 30 per cent more than their UK counterparts.
Collectively, independent retailers in Australia sold $2.44 billion worth of goods in the past year.
The report also profiled nine independent retailers that Vend and the NRA said stood out for their use of technology, sustainability efforts, innovative customer experiences and community spirit. They are (in alphabetical order):
- Beechworth Honey (Victoria)
- Biome (Queensland)
- Just Bliss Chocolates (SA)
- LUC Design (Tasmania)
- Pigeonhole (WA)
- Sacred Pet Boutique (Queensland)
- Skate Connection (Queensland)
- Status Anxiety (NSW)
- Swish Fashion (NSW)