Vote of Confidence? There is a price to pay for inaction

Businesses are warning that the inflation and supply chain crises could have a larger economic impact than the Covid-19 pandemic. In the meantime, the UK government appear more concerned with self-reflection than the type of decisive leadership that may bring a little more confidence to the economic outlook.

With the cost of filling an average family car passing £100 for the first time, spare a thought for road hauliers facing eye-watering bills to keep lorries on the roads and deliveries on track.

Naturally, this cost burden is being felt sharpy across port shipping and airfreight too, leading to end-to-end rationalisation of the supply chain which will inevitably impact fulfillment. These costs can only be absorbed for so long before being passed on to customers, adding to spiraling inflation and rising cost of living – worse still it has the potential to lead to the slow down or collapse of our vital logistics network.

It is no wonder that finance directors are in a particularly conservative mood. In times of such economic uncertainty, there is a natural tendency to pull down the shutters, minimise investment and put focus entirely on the short-term. Frankly, survival mode kicks in.

Inaction will mean that cash performance is not being managed effectively with funds left on low or negative interest rates when it could be optimised to generate much needed additional yield. Additionally, cash is not being used to help business critical suppliers when they need it most, missing an opportunity to enhance supplier relations to build greater resiliency and minimise fulfillment risk.

There is a price to pay for this inaction. Whilst many FDs will naturally be fighting fires, the brave will be keeping a long-term view. Acting decisively and taking control of their cash management through a working capital solution to free up cash for corporates and see them through these uncertain times, or indeed, to reinvest in higher yield returns.

Not only does a well thought out working capital programme make sense for a corporate, but it also provides much needed flexibility to suppliers allowing them the option for faster payments. Having stronger supplier relations may mean the difference between on-time fulfillment and lengthy delays costing valuable sales and reputational damage.

Talk to us

At Crossflow, we have created a marketplace for working capital funding that can transform a supplier’s cash flow as well as benefit the corporate’s balance sheet. We are already talking to a range of leading organisations, who are looking to act decisively to build additional resilience into their supply chain and reinforce liquidity. If this could make sense for your organisation, get in touch and we can share how our free-to-corporate platform can transform your working capital.