research product . 2021

Procurement Managers Must Adopt Supply Chain Finance as a Standard Practice [Interview]

Hofmann, Erik;
German
  • Published: 11 Apr 2021
  • Country: Switzerland
Abstract
Supply chain finance (SCF) is an important lever for managing a company’s working capital requirements. It also ensures the suppliers are paid on or before time. An effective working capital management system aims to increase the accounts payable period (DPO) while reducing the accounts receivable period (DSO) and inventory retention time (DIH). A key metric in working capital management is the “cash conversion cycle”. Procurement teams are essential in managing the payment terms and inbound inventories with suppliers. A very common SCF instrument is reverse factoring, a method by which companies pay their suppliers without using their own working capital. Finan...
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free text keywords: business studies
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