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Early payment eases supply-chain finance

Increased awareness by corporates of the role played by small suppliers in maintaining strategic supply chains has boosted the availability of early payment programmes.

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Photo: iStock

In the current inflationary and rates environment, corporates are prioritizing the health of their supply-chain partners that are facing a perfect storm of substantial increases in raw-material prices, tightening liquidity conditions and rising borrowing costs – all of which make cash-flow management a notable challenge.

A supplier survey published by Taulia earlier this year found that 38% of respondents were taking early payments in 2021 – double the number that were taking them in 2017 when the company started the annual survey.

Early payment is viewed as a highly effective tool by an increasing number of our larger corporate clients to support suppliers without impacting their own cash flow
Frederick Rugginz, JPMorgan
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“Early payment is viewed as a highly effective tool by an increasing number of our larger corporate clients to support suppliers without impacting their own cash flow,” says Frederick Rugginz, EMEA head of supply-chain finance programme management, trade and working capital at JPMorgan.

While