In its recent whitepaper, Deutsche Bank explores how supply chain finance solutions offer an internal, secure source of funding that strengthens rather than weakens the supply chain environment, guarantees ethical financial treatment of trading counterparts of all sizes, and optimises use of working capital.
The whitepaper explains how these solutions offer the following benefits- and how such benefits can and should be measured to help treasurers decide to implement such solutions or to optimise their improvements further:
- provide additional and sustainable working capital (by reducing CCC through increasing DPO and reducing DSO) at a lower cost than alternative funding sources,
- lower operating costs throughout the supply chain by reducing the total cost of funding,
- bolster supply chain stability by reducing counterparty risk, improving transparency, ensuring prompt settlement and future-proofing against interest rate increases,
- improve supply chain relationships by introducing a ‘win-win’ solution for trading partners with attractive payment terms and access to additional credit, and
- offer benefits during acquisitions and mergers by strengthening acquisition bids (by increasing the proportion of cash offered) and extending the efficiencies of one corporate to the other