Access to finance and improving efficiency are crucial for the growth of both businesses and the suppliers that they work with.
We know that cashflow uncertainty hinders business growth. But with unique solutions available today, companies can now improve their working capital, reduce costs and generate returns whilst at the same time minimising supply chain risk and giving suppliers more control over payments.
Here are three ways to improve cashflow and business continuity.
1. Evaluate your funding options
For many small and medium-sized businesses, access to working capital is critical for their growth. Business loans can come with a high cost for smaller-sized businesses, but there may be more affordable funding solutions available that meet your needs. Check if your customers are offering a supply chain finance solution and compare your loan interest rate against discounted early payment fee. American Express’s supply chain financing solutions give you access to funding at more attractive rates and provide simple digital tools where you can decide when you want to be paid. This is in exchange for a small discount, which aims to reflect a lower cost than borrowing from your bank.
2. Improve the visibility of your invoices
Consistent cashflow is crucial for maintaining a successful business. It is imperative to keep track of invoices and be aware of when you expect to receive payments. Try to leverage digital payment options offered by your customers to improve the visibility of your invoices. American Express’s supply chain financing solutions increase payment transparency and allow you to see future payments as soon as your invoices have been approved by your customers. As a result, businesses can reduce the amount of cash maintained as a buffer against payment uncertainty. If your business is experiencing the negative effects of being paid late, supply chain online tools can act as an automated invoice payments system. These can improve cashflow for your business and limit obstacles preventing payments from arriving on time.
3. Leverage digital solutions
Digital solutions can help reduce late payments and streamline your payment collection process. Supply chain finance online platforms offer automatic, flexible payment terms to suppliers. Early payment offers are automatically generated and online portals provide notifications when customers have approved your invoices, eliminating the need to chase late payments. You can also access digital platforms to get invoices paid earlier than your original payment due date and receive an early payment discount.
American Express® Early Pay is a supply chain finance and dynamic discounting solution, as the newest addition to its suite of business financing options. UK buyers can leverage the solution as a way to increase cashflow, generate working capital, and make their supplier payment process more efficient. In turn, suppliers can access the easy-to-use digital platform to have their eligible invoices paid earlier than their original payment due date at a competitively-priced early payment discount.