USE SPECIALIST TOOLS TO MANAGE WORKING CAPITAL
CREATE WIN-WIN RELATIONSHIPS
CONTRACT MANAGEMENT
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The first step is for businesses to spend time comprehensively mapping out their supply chain to find any weaknesses that could compromise their organisation ’ s drivers for success . After this , they should take a holistic approach to address any inefficiencies , working alongside partners and with financial provisions and operational improvements considered together .
USE SPECIALIST TOOLS TO MANAGE WORKING CAPITAL
Once a supply chain ’ s priorities and risks have been mapped , there are a range of tools available to help them optimise it . Supply chain finance is one such tool . It can help firms and their partners improve their working capital management .
“ The reason these are so important is that supply chains are , of course , built on relationships ”
— Matthew Hurst , Supply Chain Expert , Global Transaction Banking at Lloyds Bank
Our latest Working Capital Index discovered UK businesses have £ 680bn tied up in excess working capital . By unlocking capital within the supply chain , businesses could be better placed to invest in growth or weather turbulent economic conditions at short notice .
Supply chain finance can allow suppliers to leverage the buyer ’ s credit rating and access an agreed percentage of their due payment up-front . This means the buyer can benefit from early settlement discounts , or a more substantial payment gap , without affecting the supplier ’ s cash flow .
It can also be used in the reverse , helping corporate sellers by giving them the opportunity to retrieve payment quickly by selling off receivables from a portfolio of approved debtors to their lender , enhancing cash flow , strengthening the businesses balance sheet and adding security to the supply chain as a whole .
CREATE WIN-WIN RELATIONSHIPS
Outside funding , there are propensity modelling tools that can give corporates an overview of which suppliers
MAY 2019