Trade Finance
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Supply Chain Finance Comes of Age

by Kuresh Sarjan, Head of Trade Finance, Global Transaction Services, Asia Pacific, Bank of America Merrill Lynch

Working capital management occupies a foundational role in sophisticated treasury management. With a backdrop of brewing cash pressures, challenged growth from moderating economies and fluctuating commodity prices, working capital management has seen its strategic value expand and treasurers subsequently move up the value chain.

Given its ability to increasingly influence top line growth, working capital management is now a more firmly entrenched area of the treasury function across Asia Pacific. As such, many treasurers across the region have driven a convergence of credit functions to better harness working capital opportunities. They have linked global sales teams with procurement expertise to gain greater influence and control over their organisations’ working capital strategies. Technical innovation has also been leveraged to achieve greater efficiency in their payments and collections – whether at the local or regional level. The list goes on and on, but the bar has evidently been raised.

Clearly, an awareness of the benefits of deeper and more strategic working capital is forcing corporations to transition areas of their corporate treasury to take advantage of a changing industry. But as is the case for many sophisticated finance platforms, for companies to fully harness the power of working capital management and broader supply chain finance programmes, a back to basics approach is an advisable starting point.