Making money work harder: working capital solutions

Supply chain finance is another tool that can cut the risk of late payments and supply chain disruption. It does this by enabling businesses to optimise their working capital, and to bridge periods where they may be awaiting payment or facing a financial challenge. For example, this could look like a business borrowing money at a low rate to pay its suppliers earlier. It can then conserve its own cash, which can be invested at a higher rate to the loan. By deploying a solution like this, the business has made its own funds work harder, earning more interest, and has supported the cashflow of other companies in its supply chain.   

Used together, digital payments and working capital solutions offer the ability to bring other supporting financing tools into the equation. For example, a supplier to Company A might be used to net 90-day terms. By deploying a working capital solution, Company A could pay the supplier via trackable, automated digital payments on 30-day terms, increasing payee confidence, loyalty and satisfaction, while optimising their own returns.