All organizations are interested in improving their working capital. One popular method of doing this is through the reevaluation of supplier payment terms. There are clear benefits to paying invoices later – for the organization requesting the extensions.
The global COVID-19 pandemic put supply chain management and procurement in a very bright and positive spotlight for keeping life moving as normal as possible during all the shutdowns, disruption and general uncertainty.
It also highlighted that business and supply chain disruption are ongoing facts of life – such as ongoing extreme weather events globally and a megaship blocking the Suez Canal for weeks, to name just two. And the impacts created a snowball effect on other industries:
CPOs are always looking for new ways to increase internal advocacy and improve strategic value to elevate the role of Procurement. As the lead of an organization’s financial vision, CFOs can support their counterparts in Procurement by helping them achieve this goal.
For CFOs looking to build up that relationship, we suggest starting the conversation by focusing on building a strategic procurement plan aligned with Finance’s working capital strategy.