In a time of great change for transport and haulage firms, it can be challenging to manage every aspect of the current business while planning for the future. If you are looking to grow your transport and haulage business and adapt for the future, you may be looking for ways to improve your Cashflow so you can make important investment purchases.
One of the key financial products that can give transport companies the flexibility and control over their Cashflow is supplier finance. So, how can supplier finance benefit your haulage business?
What is Supply Chain Finance?
Supply Chain Finance is an alternative financial product that allows your supplier to receive an early payment for their invoices. A lender will pay their invoices on your behalf. Then, when you’re ready and have received payment from your clients, you can then reimburse the lender.
Supply chain finance can be a fantastic solution for transport and haulage firms, especially when it comes to clients that opt for extended payment terms.
So, what benefits can your transport and haulage business enjoy thanks to supplier finance?
The Benefits of Supply Chain Finance
- Happy, Healthy Supply Relationships
In a fast paced business, you need to ensure that you have minimised any risk in your supply chain. The best way to reduce risk is to keep your suppliers happy. The better the relationship you have with them, the more value you will see from the supplier.
This could be an expedited service, discounts or recommendations to new clients.
It always pays to focus on strengthening your supplier relationships, so that you can create mutual benefits from insider information to fast-track service, you can certainly reap the rewards.
- Control Of Your Supply Chain Growth
As your supply chain grows, it can become increasingly complex. Consequently, supplier finance gives you the opportunity to streamline your invoice management. You can offer suppliers the chance to onboard themselves onto your supplier finance system, and then they can choose to have a small discount on their invoice in order to receive an early payment. As well as benefitting you, this fast access to payment can help your suppliers to manage their Cashflow too.
By on boarding your suppliers into your supply chain finance system, you can take control of your supply chain and ensure that you none of your invoices are dropped or forgotten.
The great thing about supplier finance is that the payment for the facility is entirely flexible. You can discuss with your supplier as who will pay for the facility. In many cases, suppliers are happy to pay the small charge as a way to receive a prompt payment. This can offer you lower costs for healthier Cashflow.
- Increased liquidity
Alternatively, if the system works better for your business as a way to extend payment terms with your clients, supplier finance can be invaluable for your business, even if you do choose to pay the small fee yourself. By having your invoices paid promptly and knowing you can wait to repay this when you get paid yourself, you ensure a healthy and reliable Cashflow.
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