Financial Management – Trade Finance & Working Capital

Background:
Executing payments is often a direct result of a business needing to settle invoices due. The need to pay suppliers is an essential part of running a business to ensure your supplier is paid on time and accurately, this provides confidence to the supplier for the deal and for the future. Paying invoices relies on the business having access to working capital, accentuated if the business trades/ has suppliers overseas and/or receivables will not be settled in tome to pay invoices. As a business grows, it can be essential for a business to have sufficient access to different forms of working capital; cash @ bank (including arranged overdraft), purchase order financing, invoice finance, receivables financing.

Why is this important to businesses and corporates?
• With there now being various options available to businesses and corporates for working capital, it is important that the services are in place before the need to use them becomes apparent, to avoid embarrassing situations of not being able to meet invoices due. A reliable cash flow system combined with the right access to working capital will help ensure there are no issues when vendor payment come due.

Questions a business need to consider include:
• Do they have a good understanding of their cash flow to know their working capital needs?
• What working capital financing is best for their cash flow?
• What are the costs associated with the working capital products being considered?
• Does the finance product chosen seamlessly connect with the payment execution of the invoice/es on the due date?