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Case Study: Optimising Working Capital

 

“I need enough credit with my suppliers to allow them to sell to me,

and enough credit on account to enable me to sell to my customers.

Effective cashflow management keeps us in business.”

Joe Hemani, Owner & Chairman, Westcoast

 

 

Our Client

 

Founded 30 years ago, Westcoast, a leading IT distributor, supplies a wide range of retailers and resellers with leading IT hardware and software – from laptops to servers and licenses. Most of the printer and toner cartridges sold in UK shops probably came via Westcoast. It earned revenues of almost £2.2 billion in 2017 and employs 1,600 people.Westcoast’s successful strategy is based on fast and efficient distribution and the ability to purchase enough stock to fulfil customer demand. So that means access to effective working capital is vital.

 

Westcoast’s successful strategy is based on fast and efficient distribution and the ability to purchase enough stock to fulfil customer demand. So that means access to effective working capital is vital.

 

The Challenge

 

In the typically risk averse IT channel, vendors offer short payment terms – just 14 days in one case. Meanwhile, Westcoast’s clients typically require longer terms, such as EOM + 30, 60, or even 90 days.

 

This presented Westcoast with a challenge. They had a funding gap between when they had to pay vendors versus the terms that they offered to clients. As a privately owned company, a flexible and competitive working capital solution is key, that’s where American Express came in.

 

 

 

 

 

Our Solution

 

With our simple Working Capital Solution Westcoast can take advantage of several benefits on both the payables and receivables side of their business. We offer flexible funding periods from 10 to 88 days – giving Westcoast the ability to manage their cash flow effectively.

 

We offer multi-million pound payment facilities to both Westcoast on the payables side and their clients. This means that Westcoast can hold sufficient stock and optimise cashflow through peak trading periods while also offering a finance solution to their customers that differentiates Westcoast in a competitive market.


Benefits

ON THE PAYABLES SIDE

 

  • An additional payment facility
  • An extension in payment terms up to 88 days

ON THE RECEIVABLES SIDE

 

  • Increased loyalty and number of customers
  • Increased protection from customer default
  • Increased speed of payment 

 

FOR WESTCOAST'S CUSTOMERS

 

  • An additional payment facility
  • An extension in payment terms up to 88 days
  • No costs, no annual fees, no interest - facility is fully funded by Westcoast

 

"One of the most important things for Westcoast is our customer loyalty, and American Express generate that loyalty, largely because they’re providing an extended payment term."

Alex Tatham, Managing Director, Westcoast


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American Express Services Europe Limited has its registered office at Belgrave House, 76 Buckingham Palace Road, London, SW1W 9AX, United Kingdom. It is registered in England and Wales with Company Number 183313 and Regulated by the Finacial Conduct Authority.