Parul
A white paper titled “Working Capital Playbook – Logistics: A Comprehensive Guide to Supply Chain Financing revealed by CredAble, a fintech firm that provides supply chain finance and working capital solutions provides insights into the financial challenges encountered by logistics companies. These includes extended payment cycles, cash flow constraints, collateral accessibility, and cost fluctuations. Furthermore, it presents pragmatic solutions and strategies to bolster financial efficiency, stability, and expansion.
In the face of these financial challenges, a significant 71 per cent of logistics professionals have acknowledged the hindrance posed by cash crunches, impeding operational optimisation and expansion. Additionally, the escalating geopolitical tensions surrounding fuel supply and diminishing warehousing availability underscore the pressing need to address these financial complexities. Consequently, average working capital requirements are projected to increase from 20 per cent of revenue in 2017 to a projected 25 per cent of revenue by 2025.
In this context, the white paper aims to empower the logistics industry by addressing key working capital challenges, including capital investments, operational costs, and contingency funds, to help it reach its full potential. The paper thus intends to serve as a valuable resource by offering solutions, strategies, industry wide best practices, and SCF solutions such as early payment programs for suppliers, purchase order discounting and among others, to optimise working capital, streamline operations, and enhance financial stability.
The paper is statistically driven and focuses on:
- The corelation of growth with efficient working capital financing – with 70 per cent of the companies that adopt supply chain financing being able to expand within 1 year.
- A numerical analysis on how liquidity crunch in the APAC markets might push corporates to reduce equity dependence.
- The savings that can be generated through credit underwriting and operational efficiency, as backed by empirical and statistical evidence.
It further highlights the experience CredAble has had in facilitating improved financial positions across clients through: - A 37.37 day acceleration in the cash conversion cycle through CredAble’s Early Payment Program.
- Expected savings of upto 14 per cent for treasury funded Early Payment Programs with 75 per cent+ Vendor Participation
Commenting on the launch of the pioneering white paper Ram Kewalramani, Co-founder and Managing Director of CredAble, said ” At CredAble, our goal has always been to empower businesses by solving complex financial challenges. The logistics sector plays a pivotal role in global trade, and managing working capital efficiently is a key driver of success. Moreover, our white paper on the ‘Working Capital Playbook – Logistics’ demonstrates our commitment to providing logistics companies with the knowledge and resources they require for optimal performance. By unlocking the potential of supply chain financing, we aim to foster growth, sustainability, and efficiency within the industry.”
