Navigating inflation with working capital solutions
Inflation measures the rate of rising prices of goods and services in an economy. A little bit of inflation is a good thing as it demonstrates that an economy is operating effectively and maximizing supply and demand. However, excessive inflation can have significant negative impacts as it leads to higher prices for goods and services and ultimately erodes the future value of savings.
Today, inflation rates globally are averaging between 8% – 10%, well above the targets that most central banks are comfortable with. As prices increase, nowhere are the trickle-down effects of inflation more noticeable than in the supply chain where increases in costs of raw materials, inventory, transportation, and wages are all passed along to the finished product. Furthermore, suppliers that wait 45, 60, or 90 days for payment of an invoice, can see the effects of inflation as the value of that transaction is lower than when they shipped the goods.
SAP and Taulia can help customers navigate these difficult times by leveraging digital collaborations on SAP Business Network and the working capital capabilities of Taulia. Ultimately, our goal is to provide more transparency into the supply chain, help companies better understand imbalances, and find where opportunities exist for improvement. Furthermore, companies can explore opportunities to improve working capital positions by utilizing Taulia’s payables, receivables, and inventory solutions which can help suppliers access liquidity needed for growth and investment.
- Early payment solutions like dynamic discounting and supply chain finance can help suppliers get paid early to meet cash flow needs for reinvestment into their business or unexpected expenses.
- Accounts receivables financing allows suppliers to unlock cash that is trapped in their unpaid invoices by selling those receivables to get paid quicker. This solution is offered to U.S.-based, small to medium sized SAP Business Network suppliers via our embedded SAP Supplier Financing widget on found on a supplier’s trading partner portal. Taulia can also create much larger and tailored accounts receivable financing programs for enterprise suppliers on the network to address unique funding needs.
- Inventory solutions can help companies lock in the prices of goods at today’s prices and protect against the erosive effects of inflation over time.
Our solutions aim to help companies gain insights into their supply chain and solve the complex operational and financial issues that they are faced with on a daily basis. By providing visibility and options to manage their working capital needs, businesses will be better equipped to operate in today’s challenging economic environment while building a more resilient and healthy supply chain.