Innovation in a Time of Disruption
June 26, 2020 |
The C2FO Team
For many businesses, thriving in the wake of COVID-19 will require course corrections and adapting to new norms. C2FO’s working capital solutions can help your organization respond quickly during this unstable time.
In today’s turbulent economy, you may feel like your company is a ship caught in a perfect storm. Helpless to stop external forces, your only choice, it seems, is to bob up and down with the endless waves and hope you don’t take on too much water.
The constant disruptions to you, your customers and your suppliers may seem overwhelming. But there are proactive steps you can take to steer your company through the storm. History shows organizations that choose to innovate in times of great turmoil, as opposed to just battening down the hatches, have the greatest potential for future opportunities and success.
Andy Warhol, the great pop culture artist who was constantly reinventing himself, put it this way: “They always say time changes things, but you actually have to change them yourself.”
The working capital solutions of C2FO are one innovative way to address unwelcome change and make it work in your company’s favor. From a single platform, C2FO today matches more than $1 trillion in accounts receivable and accounts payable for 1.1 million companies around the world.
The power of this global network can provide your company with numerous options in managing capital during a time of uncertainty. You can use the C2FO platform to accelerate payment to your suppliers in exchange for a discount. C2FO’s funding network can also accelerate payments on your behalf if you need to maintain your working capital position. The platform also enables your customers to earn discounts by paying you early, or they can address their cash positions by paying later, in exchange for a premium.
“The flexibility and ease of the C2FO platform gives you greater control of working capital, not just for your company, but for your suppliers and customers as well,” said Dru Shiner, chief sales officer for C2FO. “The result is greater financial strength for everyone in your ecosystem, which is particularly crucial during these unpredictable times.”
In this article, we’ll cover how the C2FO platform can help your company take an innovative approach to managing capital in three ways:
- Providing a single, easy-to-use resource with multiple financial tools for you, your suppliers and your customers.
- Offering the flexibility to pay suppliers early from your own balance sheet or through C2FO’s funding network.
- Initiating an early payment program that drives supplier participation, providing a return on cash that helps you meet key financial metrics.
Flexibility when facing upheaval
Many business leaders will look back on the COVID-19 pandemic as the most disruptive, troubling time of their careers.
However, history is filled with moments that posed existential challenges for even the most powerful brands.
Anheuser-Busch is one of the world’s most storied and successful brewing companies, with more than 168 years of proud history.
But there was one bleak time when the St. Louis, Missouri-based brewer nearly went under. That time was Prohibition, the period from 1920 until 1933 when the sale of alcoholic beverages was illegal throughout the United States.
More than half of the country’s breweries closed during Prohibition. Anheuser-Busch, led by August Busch Sr., chose to diversify, retooling its breweries to produce more than 25 non-alcohol products, including soft drinks and ice cream.
That imaginative approach to a huge economic disruption enabled Anheuser-Busch to survive, then go right back to brewing beer when Prohibition finally ended in the early 1930s. Today, the company still produces Budweiser and other popular labels in downtown St. Louis, and is part of the world’s largest brewer, Anheuser-Busch InBev.
Today’s challenges won’t force many companies to switch out their entire product lines. However, many of them will need liquidity to make the course corrections needed to survive or even thrive in the aftermath of a global pandemic. Actions taken by governments and central banks to pump more money into the financial system will provide some assistance, but they won’t be nearly enough.
Here’s how the C2FO platform is structured to help — quickly.
One platform, many dynamic solutions
The C2FO platform is designed to provide optimal flexibility for your company, your suppliers and your customers to manage capital — all from one location. The following solutions are housed within the platform and can be implemented at any time.
Dynamic Supplier Finance
C2FO’s platform enables your suppliers to accelerate invoices in real-time when they choose. Early payment is available at any point throughout the entire payment term — on-demand when your suppliers need it.
Unlike supply chain finance solutions, C2FO’s comprehensive network enables all of your suppliers to access accelerated cash flow. With C2FO’s platform, supplier segmentation is automated, allowing you the flexibility to provide preferred access and incentives to minority-, woman- and veteran-owned suppliers, as well as suppliers that are small to mid-sized businesses (SMBs).
Whether you are utilizing your own balance sheet or a partner in C2FO’s funding network, your suppliers have the capital they need to grow, whether they are SMBs or large corporations.
Dynamic Customer Finance
With C2FO, your company can dynamically adjust the timeline of outstanding receivables, on-demand.
You decide when to offer which solution – and at what price. Whether your company is focused on improving cash flow, mitigating customer risk or managing key metrics, C2FO’s platform provides comprehensive receivables acceleration through various funding options, including early payment by your customers.
C2FO also enables you to generate income by allowing customers to pay you later, in exchange for a premium. This dynamic model gives you full control over which invoices are included, their funding methods, and at what price. By offering innovative financing solutions, C2FO enables you to achieve your targets while strengthening your customer relationships.
Invoice Central delivers seamless visibility across all of your accounts payable and accounts receivable, giving your suppliers one place to review outstanding receivables and take action when needed.
Your suppliers will have a clear understanding of where their invoices are in the approval process and you will have a greater ability to analyze and benchmark the data of your AP and AR through the C2FO platform.
Speed and adaptability
The urgency of the pandemic has forced companies worldwide to discard their usual processes and protocols to adjust to the crisis, from managing their supply chains to providing crucial products and services faster.
In no other industry are those adjustments more apparent than in pharmaceuticals, where drug companies and regulators are working together to fast-track research and development of a vaccine for COVID-19, while also readying their supply chains for quick production and distribution. According to the World Health Organization, more than 130 vaccines are currently under development, 10 of which are already being tested on humans.
“This process is typically sequential,” David Simchi-Levi, director of the MIT Data Science Lab and professor of engineering systems, recently told Supply Chain Dive. “We cannot afford a sequential process. We need to start the manufacturing capacity today, and the problem is it requires significant investment.”
In times of disruption, the need for liquidity among companies of all sizes is also urgent. They need working capital solutions that are fast, flexible and easy to use. Traditional lines of credit are not always reliable, as banks work to minimize risks in turbulent situations.
The speed, agility and accessibility of the C2FO platform can help. Supplier finance programs can be activated in as little as four weeks and the average payback period for customers is 4.7 months from a program’s launch. The platform’s technology is easy to use, providing you and your suppliers full visibility to receivables and payables. C2FO proactively onboards your suppliers to the platform. Because suppliers can determine their rates and select invoices to fund as needed, supplier participation in C2FO programs is much higher than in SCF programs.
For European technology company Phillips, implementing an early payment program through C2FO for its thousands of suppliers took 10 weeks and achieved an ROI within 30 days. More than 1,500 suppliers participated in the program almost immediately, far more than the number of participants in Phillips’ other SCF programs.
“We rolled the program out to 133 different countries, in multiple currencies within the first few weeks,” said Alexander Visser, Phillips’ CFO of Global Procurement. “In addition to a strong contribution to EBITDA we have also successfully navigated our working capital KPIs.”
The C2FO platform’s user experience includes the following:
- A single log-in to a centralized platform
- Supplier registration within minutes to get started on accelerating invoices
- Visibility across your company’s entire supply chain
- Easy-to-use Invoice Central, requiring only two clicks to cash flow
- A worldwide supplier care team providing outstanding service in multiple languages and time zones
- Activation of your program in as little as four weeks
- The ability to expand your program across multiple countries and currencies
- An average of 6,000 supplier participants per client, compared to just hundreds in most SCF programs
- Simple, secure nightly CSV file exchange
Adapting to change on your terms
“The measure of intelligence is the ability to change,” Albert Einstein once said.
Looking at times of disruption as opportunities to innovate and solidify relationships with customers and suppliers is a far more effective approach than adopting Band-Aid solutions that only work until the next crisis comes along.
Having a single platform to manage working capital across your entire ecosystem is one innovative way to tackle today’s challenges, as well as anticipate the ones your company may face tomorrow.