Many corporate treasurers hold operating cash for liquidity purposes in places like short term treasuries, banks and money funds. According to the Investment Company Institute, corporate treasurers and professional investors have close to $900 billion in prime money market mutual funds. The funds, which hold assets in short term corporate debt, are about 35% of the $2.6 trillion money fund industry. On June 5, 2013, the Securities and Exchange Commission voted unanimously to propose additional measures that would reform the way that money market funds operate to make them less susceptible to runs that could harm investors. There are two […]
Trade Financing Matters welcomes this guest article from Brian Shanahan, founder of Informita and Termscheck.com and co-founder of The Working Capital Channel. Last week we examined some of the caveats benchmarking payment terms. Most of the resources out there have some holes in what they offer. It’s not a perfect science by any means but one that can be a powerful tool come time for negotiation with your buyers or suppliers. Take for example a global based pharmaceutical company with revenues of over $35 billion that has many distributors established across the Middle East and Africa. In several of these […]
By now, many of us have all seen various posts around the blockchain and how it can impact everything from getting a mortgage to selling a security. It’s why all the old guys over the last few years have been coddled up to the twentysomethings – an interesting marriage of connections and business acumen with a deep understanding of how the software and cryptography works. A few blockchain vendors have contacted me recently and one common theme I hear from them is banks are much more accessible to taking their meetings than just a year ago. Banks history with product […]
Leveraging Technology on the Buy-Side in Planning for Higher Interest Rates and Restricted Bank Lending
Throughout this series, we have explored the role that the risk of rising interest rates and reduced bank lending to small and medium-sized businesses is likely to play in driving up supply risk, along with some of the foundational procurement-centric technologies that can help. Today, as we conclude this exploration in the final installment of this series, we’ll highlight just a few of the trade financing techniques and technologies that can help procurement organizations play a leadership role in proactively preparing for and addressing supply risk.
Anti Bullying messaging is all the rage. We all are hyper focused on the subject for our kids, as many of us were probably the victims of some form of mental (and to a lesser degree) physical bullying. So as a supplier, how can your buyers “bully” you? Well there are several ways. According to a poll by the UK’s Federation of Small Businesses, almost 1 in 5 of their members felt they faced unfair practices in the past two years. According to them, the top five “most resented practices” were: Pay to stay. Also known as “supplier assessment charges” […]
A Technology Foundation to Reduce Supply Risk With Higher Interest Rates and Restricted Bank Lending
The combined specter of rising interest rates, reduced bank lending to small and medium-sized businesses, demand/supply variability and economic growth prospects in a number of European and Asian countries – most notably China – suggests a rather dangerous supply risk cocktail is brewing for procurement organizations.
In the first installment of this series, I provided an overview of why these challenges matter and can contribute to supply risk. Today, I’ll share how specific solutions can help address these challenges – and build into applying trade financing techniques in the most targeted and strategic manner.
While the recent market correction may call into question the Fed’s expected trend to raise interest rates, it is inevitable that interest rates are going to climb in the coming years – the question is “when” and not “if.” But whether a rise in rates is combined with further restrictions on lending to small (read: risky) businesses due to the need to maintain more conservative lending standards – thanks to the latest Basel III restrictions – is perhaps just as important a question to ask.
Certainly, even a double whammy of higher interest rates combined with restrictive bank lending could have a significant impact on the ability of suppliers to access capital on reasonable terms. In the coming weeks on Trade Financing Matters, we’ll explore the potential impact of these challenges as well as potential approaches to proactively reduce supply chain risk. Today, we’ll start by tackling how such a climate could impact suppliers – and procurement.
Love it or hate it – you’re likely in the latter category if you need a new hip or knee – the National Health Service (NHS) is a model of transparency compared with many health systems throughout the world. But that transparency has not extended to accounts payable and supplier management activities on a systematic basis to date, although individual health trusts have worked their own efforts with solid results. (As an example, Steria and Tradeshift have success with a small corner of the NHS.)
Yet change is coming. In a recent column in The Information Daily, Basware’s Steven Carter highlights how UK central government is taking steps to make prompt payment standard within the NHS, which depending on your perspective, requires e-invoicing.