Would you cash in a winning lottery ticket that could be worth hundreds of millions of dollars?
That’s a silly question, but for many corporate finance departments, the equivalent of a winning lottery ticket is buried in a pile of payment terms that no one pays attention to, much less manages.
For organizations with growing cash balances and healthy balance sheets, managing payment terms may not be a priority. But not every organization fits this profile, and the good times may not roll forever. Which makes the search for this “ticket” an intriguing business initiative.
What makes this opportunity even more appealing is the potential of a business network to make it happen.
Managing payables over a business network is the next major advance in corporate finance. Early adopters are reaping the benefits. For example, there’s the global pharmaceutical company that extended payment terms from 45 days to 60 days for tens of thousands of suppliers, while providing early-payment discount options to suppliers that wanted earlier payment. The payback is staggering: about US$300 million in free cash flow and $10 million in earnings from the discounts.
The business network is the catalyst, enabling collaboration between trading partners that can help both parties better manage cash and working capital. This is good news to treasurers, but they need to get up to speed on how to make it happen.
Such a learning opportunity is upon us. On Tuesday, January 30, 11 a.m. EST, the treasury consulting firm Strategic Treasurer will host a Webinar entitled Overcoming Obstacles to Achieve Breakthroughs in Working Capital Management. Here you can learn about strategies for setting up collaborative cash and working capital management programs along with case studies of companies that have achieved sustainable working capital improvements from them.
In today’s digital economy, you can increase your cash earnings and optimize working capital, too. Could this be your ticket to improved financial performance?
Don’t miss Strategic Treasurer’s new Webinar on optimizing working capital management.