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Managing cash flow and FX risk

American Express AccessLine™ Case Study – Managing Cash Flow and Financial Complexity in the Import IndustryArticle

Growing Strong with AccessLine

How AccessLine helps an importer to manage cash flow and financial complexity and stay ahead of the competition.

Importing quality office furniture is a tough business. To stay ahead of the competition, Smac Imports, a long-time American Express Corporate customer, needed access to significant capital as well as tight cash flow management.

With American Express AccessLine, Smac Imports can pay its overseas suppliers at the time of ordering, with up to another 51 days before funds are charged to their account. No matter where they are in the world, Smac Import’s management team can pay their overseas suppliers any time, in any currency. And AccessLine’s online portal has streamlined administration and reporting. What’s more, Smac Imports earns reward points on all payments that can be redeemed for a range of expenses such as overseas travel.

Cash Flow Is King

Smac Imports works with manufacturers of quality office furniture across the globe, including overseas suppliers in China, Italy and Turkey. Its executive seating, lounges, workstations and more can be found in the offices of leading corporations such as Ernst and Young. It’s a highly competitive industry

According to Managing Director Lachlan Macdonald, who took over running the business from his father five years ago, the key to their ongoing success is outstanding customer service and impeccable cash flow management.

“If you can fulfill orders fast, look after your customers and do it with good manners, you have a significant edge on the competition,” Lachlan said. “But cash flow management is king. No cash flow, no business.”

Smac Imports’ overseas suppliers all require payment up front. But it can be as much as six months between a customer expressing interest in a product and actually placing an order.

“The time lags between capital outlay and sales income create ongoing cash flow pressure. At the same time, this year we were pursuing a number of growth initiatives, so we needed added funding flexibility,” Lachlan said.

Managing Financial Complexity

Lachlan sought a cash flow facility that would provide both efficient cash flow management and a flexible, cost-effective source of short-term funding. In American Express’s AccessLine facility, he found what he was looking for.AccessLine enables companies to pay overseas and domestic suppliers fast and securely, regardless of whether they accept card payments, and the funds are not charged for up to 51 days. Accessed via an online portal, AccessLine streamlines payments with comprehensive reporting, as well as earning Card Members Membership Reward points.

Since 2015, Smac Imports has been using AccessLine to pay overseas suppliers, as well as for domestic payments such as those to its freight forwarding supplier. And to make maximum use of AccessLine’s 51-day payment window, Smac Imports has introduced a new supplier payment strategy.

Said Lachlan: “Our overseas suppliers typically require a 30-50 per cent deposit at the time of order and then the balance prior to shipment. We try and run all our major payments on the first day after Amex calculates its monthly charges – that way we effectively get up to 51 days interest free.”

As a major importer, Smac Imports has to manage payments in multiple currencies. AccessLine provides it with a competitive foreign currency payments service, as Lachlan explains:

“We evaluated the alternatives and found American Express spot rates for payments on the card were very competitive. Now, no matter where I am in the world, I can make a payment to our suppliers via the portal. And we earn points on all our corporate payments. We go on a lot of overseas buying trips to search for new products and I can use the AccessLine reward points for flights. This blows all the other financial solutions out of the market,” he said.

“AccessLine is a great facility. It’s flexible, easy to use and we gain points we can use for anything we like. We get great rates, great service and the reporting helps minimise our administration.”

Reaping Rewards

With the help of AccessLine’s finance, cash flow and foreign exchange facilities, Smac Imports has funded a new website and a number of industry-first marketing initiatives to generate sales leads for its reseller partners.

“Anyone today can jump on a plane, go to a furniture fair and find products. What we’ve found, however, is that some resellers that go direct can discount too far and then not sustain repeat orders,” Lachlan said.

“While it costs us more to have a significant amount of stock held in our local warehouse, it works out better in the long run as our customers value our fast turnaround times and reliable service. AccessLine helps us deliver on this promise,” he said.

In this highly competitive industry, other furniture importers have come and gone. But Smac Imports is now in its 35th year and growing ever stronger. Helped by AccessLine’s flexible financing model that delivers added business benefits, it is expanding its operations across Australia.

AccessLine

An innovative trade finance product from American Express which makes international and domestic payments simple for business. Benefits include:

  • Access without issues

    - make simple, secure payments to suppliers within Australia and overseas – even if they don't accept cards

  • Keep cash flowing

    - allows efficient management of cash flow and opportunity to negotiate early payment discounts on domestic and international payments, with up to 51 days to pay

  • Speed and efficiency

    - streamlines domestic and international payments and provides comprehensive reporting for improved visibility

  • Rewarding to pay

    - earns one American Express Membership Rewards point for every dollar spent on payments

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