Supply chain finance is a new and exciting area of business that has the potential to transform how companies work. However, it's still a niche subject, so many businesses don't know what supply chain finance is or why they should care about it. This article will explain why every person in your company should understand supply chain finance.
The information you receive from your suppliers is often incomplete, out of date or not available at all. This can make it difficult to get an accurate picture of the health and financial performance of your supply chain.
Supply chain finance companies often provide visibility into tens or hundreds of thousands of suppliers. They are able to do this by automating the data collection process and creating a standardized way for their customers to share information with them. The result is that they have better visibility than anybody else in their industry when it comes to supplier data, which gives them an advantage when negotiating terms with suppliers on behalf of their customers (for example: invoice finance providers).
The other major issue is that it's difficult to see the impact of supply chain finance on your business. Supply chain finance is considered to be outside of a company's core operations, so it doesn't have the same visibility as more traditional line items such as sales and marketing or human resources.
Supply chain finance isn't a priority for most businesses, either: even though supply chains are complicated, they're often not perceived as complex enough to warrant dedicated budgeting or investment in technology. This means that many companies don't invest in the right tools and technology needed to strategically manage their supply chains—or worse yet, they put off investing altogether because they don't think it's worth their time.
A final challenge comes from suppliers themselves: many suppliers don't understand how important it is for them to integrate with different systems across their own networks and those of their customers' networks (for example, by using APIs). They may also lack access or expertise when it comes to building these connections themselves.
In the context of supply chain, finance is a complex subject that can be difficult to see how it impacts other areas of your business. While traditional finance departments focus on managing cash flow and working capital, supply chain finance is not a core function of the business. Instead, supply chain finance is often treated as a cost center rather than a profit center that can provide value across multiple functions within an organization.
The truth about why you should care about supply chain finance has nothing to do with money or return on investment (ROI). Instead, it's because when companies don't consider how their supply chains work together effectively, they end up with products or services that aren't meeting customer needs or expectations—and ultimately lose revenue opportunities over time due to poor product quality and service delivery performance.
Many companies still use paper-based processes to process their invoices. This means that they have to manually enter the information into a computer system, making it difficult to audit and even more prone to errors. For example, if you receive an invoice from Amazon but forget to add it into your accounting software then there is no way to track whether or not you paid the invoice on time or not.
While supply chain finance is a niche subject, it's not something you need to be an expert in. As long as you're familiar with the basics of how money moves through an organization and have some knowledge of key financial concepts like cash flow, you'll be able to follow along as we look at this subject.
Supply chain finance is a specialized area and therefore requires some degree of expertise from its practitioners. This book will give you all the necessary information so that you can understand what's going on when your company uses supply chain finance products or services.
Supply chain finance is a niche subject, and not one that many business leaders have had the opportunity to explore fully. Despite this, there’s no doubt that if you’re interested in developing or improving supply chain finance processes it can be difficult to see its impact on your business.
Many businesses still use paper-based processes – which are slow and inefficient – so it’s easy to think that they don't need a solution until this changes. They may also believe they don't have time now because they're busy with other priorities like marketing or customer service.
Supply chain finance is even harder for companies without dedicated teams who are focused on making sure it works well across their organisation. In these cases, it's common for someone else within the organisation (such as an accounting department) to take ownership of supply chain finance and make decisions about how things should work – but with little knowledge of how best practice looks like from experience; or what impact those decisions might have elsewhere within the business (for example whether there are better ways of doing things).
Supply chain finance matters to everybody in a company.
It's important to the CEO, CFO, and COO. Supply chain finance is one of the most important functions in any company because it is responsible for making sure that all purchases are paid for on time and in full. Without this function, businesses would not be able to operate effectively.
Supply chain finance is also extremely important for marketing departments because it ensures that companies have enough cash on hand so they can pay their suppliers when their products are delivered by those suppliers (i.e., “paid on time”). This means that if you're selling something through your website or retail store and you don't have enough cash coming from customers to make payments on time, then either you'll end up being sued by your suppliers or they won't deliver product anymore—causing both problems with cash flow and supply chains!
Supply chain finance is an important part of running a business. It's time to start paying attention to supply chain financing and understand its impact on your own business.