In today’s challenging economic environment, liquidity has become central to corporates’ working capital strategies. For buyers in a relatively strong position, supporting their supply chains is also a key imperative. To do this they can draw upon a range of options – from traditional supply chain finance programmes through to cutting-edge, digital dynamic discounting tools, says Adeline de Metz, UniCredit’s Global Head of Working Capital Solutions.
The ongoing global economic downturn caused by the coronavirus outbreak has resulted in supply chain disruptions, payment delays and, in some cases, payment defaults.
With many businesses facing a dip in revenues over the short and perhaps medium term – while still contending with fixed costs such as payroll and rent – buyers will rightly be thinking about the measures they can take to extend support down their supply chains. This is not just a social good – the notion of supporting loyal partners in their hour of need – it is also a critical imperative from a business continuity perspective.
Making the right decisions as to which techniques are the best will, as ever, require a considered and nuanced analysis – with today’s financial challenges unlikely to be resolved with a single silver bullet. Buyers looking to achieve the best results will need to think carefully about the unique needs and constraints of their situation and determine the best course of action for themselves and their suppliers, given the circumstances.