Strategy Kyriba

Unlocking Cash with Supply Chain Finance


Sponsored by Kyriba

Learn how supplier financing can add 15%+ return to your organization and reduce risk in the supply chain. Identify organizational goals and master three keys to success in supplier financing.

Since the beginning of 2016, there have already currency markets have seen a considerable amount of volatility, a continuation of 2015’s spikes in volatility following the European Central Bank’s continuation with quantitative easing, and the Federal Reserve’s decision to tighten its policy with the first US interest rate increase in over nine years.

It is clear that currency movements are correlated globally and no longer regionalized. We can also reasonably predict that, unlike other eras of heightened volatility, what we are witnessing today is persistent volatility and will extend into the foreseeable future. As a result, sitting on the sidelines to “wait out the volatility” is not an option for chief financial officers (CFOs) and treasurers. With hedging programs in place, what other opportunities are there for organizations to generate opportunities to mobilize cash?

With companies becoming more international, global supply chains continue to expand, putting pressure on CFOs to manage a greater number of suppliers as well as additional foreign currencies in these new regions. This also impacts working capital, as payables may not fully align with receivable currencies – forcing treasurers to mobilize cash.

Global supply chain finance (SCF) programs help meet this need, with banks keen to introduce multi-currency funding. SCF programs serve to improve working capital for “the buyer” by extending payables terms while simultaneously feeding suppliers’ need to improve their own liquidity positions. From an FX perspective, companies will more easily be able to make payments through these models and manage collections specifically in emerging markets, thus reducing the overall exchange rate risk in those areas. Bringing together multiple banks to support a supplier financing program also allows partnering with banks that have regional specialization, as well as increasing the overall financing of the program.

There are many strategies to support gaining visibility into foreign currency exposures as well as taking steps to mitigate FX risk. Whether an IHB or a new SCF policy, treasury teams can be more agile, enabling CFOs and treasurers to be more proactive in aligning their strategy to the persistent volatility in today’s currency markets. increasing the overall financing of the program.

Join a complementary webinar, Unlocking Cash with Supply Chain Finance, on June 23rd to understand how supplier financing can add 15%+ return to your organization and reduce risk in the supply chain.