Buyer Analytics

No doubt buyers and sellers are concerned about the economic crisis. Buyers need to be concerned about their supplier's ability to maintain access to capital. It is highly possible that you may receive a bid response that is subject to the supplier obtaining adequate financing.

Some good articles to get up to speed, hot off the press from the Economist:

This week governments made three spectacular moves to save the system: a coordinated rate cut by the world's main central banks, a decision by America's Fed to lend directly to companies, and a comprehensive rescue package for British banks. We assess those moves, we look at the consequences of the continuing panic, and we publish a 19-page report on the world economy in crisis.

Need some strategies to optimize cash flow? Be sure to check out an Ariba white paper titled: Strategies for High-Yield Working Capital in Today’s Economic Environment.

Some of the strategies and measures they have taken to remove supply chain liquidity risk while raising their return on cash and reducing their net working capital are:

1. Discount Management – Gives the ability to use cash to finance supplier early payment—preserving the suppliers’ health—while at the same time generating excellent short-term returns for the company.
2. Third Party Financing – Introduces a third party to fund accelerated payment to suppliers at very low rates—again removing supply chain risk—thus enabling the extension of Days Payable Outstanding (DPO) and lowering net working capital needs.