In today’s volatile trading environment, businesses need agile strategies to compete effectively on a global scale. They also need agile procurement functions that are able to adapt quickly and efficiently to external trends and risks.
It is, therefore, critical for procurement to develop sustainable purchase-to-pay strategies that deliver savings, increase efficiencies and build a healthy supply base. This helps build healthy cash positions that underpin agile business strategies.
Traditionally, buyers and suppliers have viewed themselves on opposite sides of the cash flow equation, with buyers extending payment terms when times get tough, squeezing the suppliers they rely on for efficient delivery of materials and services.
This tension is harmful to both parties: buyers depend on affordable, predictable access to products and services, just as suppliers rely on steady orders and prompt payment to keep their businesses healthy, irrespective of their size or location.
Unfortunately, many companies have accepted this status quo and believe it will never change. But this pervasive issue can be addressed with modern technology in a cost-effective, scalable and flexible way.
With the latest technologies, the trade-off between a buyer’s commercial objectives and the health of its suppliers is easier to manage and understand. Buyers and suppliers are able to build more transparent relationships, which can help to eliminate inefficiencies, unlock cash and reduce financial risks to the business. Technology can also help both parties join forces to manage cash flow on more bespoke terms.
The financial supply chain is at the heart of business strategy and the success of an organisation. Allowing buyers and suppliers to choose how they pay and how they are paid, automating inefficient processes, unlocking cash and powering a new kind of connected global economy will create a far more agile function; one that is capable of meeting the ever-changing requirements and demands of global commerce.
Barbara Holzapfel is chief marketing officer at Taulia
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.