Game changers are easy to spot. They are the ones who want to make sure that tomorrow is better than today. They are the dreamers, the innovators, the ones who think the impossible is a challenge waiting to be bested. And in today’s competitive marketplace, it will be the game changer who will stand out from the crowd. How will they do this, you ask? They will understand that working capital optimisation is so much more than jargon.
Being a game changer means being able to identify opportunities that will transform your business, but transformation takes cash and a lot of it: cash to fund research, cash to fund projects, cash to invest in infrastructure and support growth. However, the necessary funds are not always readily available. Our game changers understand that opportunities lie within the supply chain and they can help them soar. With over $14tn currently trapped in supply chains, the opportunity to streamline and optimise working capital is huge. Layer this with improved supply chain health, confident suppliers and a happy accounts payable team and the possibilities are endless.
So how is it done?
Game changers know that there is much to gain by tackling working capital proactively. It isn’t enough to make small improvements here and there: in order to succeed, you’ll need to go further than that and adopt a game-changing approach.
What does this mean in practice? Here we outline three simple steps that will make you a Game changer:
1. Be the game changer
Don’t second guess yourself – you are the game changer in your business. This means that you understand the need to innovate within your team and your department. Innovation in the financial sector means that you can move away from obvious solutions that only capture working capital benefit from a small number of suppliers to capturing benefit from the full spectrum of your suppliers.
Harnessing the power of emerging technology and, for example, using artificial intelligence (AI) to monitor early payment behaviour across large numbers of transactions can lead to deep analysis of companies’ supplier payment files, which can, in turn, provide an insight into opportunities to reduce finance costs across your supply chain.
Not only that but you will be able to use the information gathered from the thousands of invoices to make instant decisions – decisions that will positively affect FX hedging, investment options and building strategic buying relationships.
2. Goals… Goals… Goals…
Start any working capital project by setting out clear goals. To develop the right goals you need the right understanding of your business and its operations. This takes diligence and data – lots and lots of data. For instance, how do suppliers invoice you? How do they contact you when it goes wrong? How long does it take you to approve an invoice? What does your existing procure-to-pay process look like? And what should it look like?
3. Talk to those who matter
Internal partners make the difference between success and failure. Creating a team consisting of procurement, treasury, finance, IT and legal will ensure that everyone has bought into the programme, and has a say in timelines, deliverables and priorities.
Add in senior sponsors from the C-suite who ensure that all teams have the programme implementation as a priority and you won’t fail to achieve what you set out to. Don’t forget though, you still need a leader to bring these teams together and on track – that leader is you.
Often left to last, suppliers believing in your programme will also help make it a success and their continued belief in the programme is what makes the initiative prosperous in the long-term. Suppliers should be segmented and outreach methodology used based on the understanding of their needs. Some suppliers are so essential to the business that speaking to them and helping them understand the nuance of your programme is much better than sending an email.
Sooner than you thought you will have a well-running programme, but your work won’t stop there. Take a well-earned pat on the back and put your nose to the grindstone again. There will always be new suppliers coming onboard and new ways to use the data to inform business decisions.
Juhie Kapoor is Director of Content and Communications for Taulia and has previous experience as a journalist as well as ten years’ experience in marketing and bid management for leading transaction banks.