When global disruption from COVID-19 first struck in early 2020, businesses everywhere moved into survival mode, particularly through multiple capital preservation strategies. 

Billions of dollars are tied up in supply chain inventory worldwide. When retailers and manufacturers prioritize releasing working capital from supply chains, this usually takes the form of stretching out supplier payment terms and canceling orders or placing them on hold. The resulting financial stress on fragile overseas supply networks can be catastrophic, undermining future assurance of supply and a carefully cultivated supplier base that’s been aligned over time to enterprise quality and cost goals. 

Smaller suppliers, especially those located in developing economic regions, often lack business funding options. Others face high borrowing costs in local banking markets. Cash-strapped suppliers will have difficulty fulfilling your remaining orders or future needs, shipping on time or even staying afloat, directly increasing your enterprise risk to assurance of supply and end customer satisfaction.

The solution to mitigating supply chain risk from working capital optimization needs begins with digitalizing direct procure-to-pay processes and related documentation. With a digitized cloud network connecting global suppliers and buyers as a transactional foundation, the increased access to reliable supply chain data supports more robust and precise risk assessment for all participants, affording maximum financial flexibility for buyers and increased financial security for a global supplier base. 

Learn three secrets to realizing greater business liquidity and a more financially sustainable global supply chain with the right approach to digitalization.

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