Importers and exporters can use financing tools to shorten the cash conversion cycle and increase liquidity to maintain a competitive edge.
To stay competitive in today’s business environment, companies are looking for ways to optimize their working capital and ensure they have cash available to take advantage of business opportunities.
Companies engaged in international trade generally have two ways to shorten their cash conversion cycles and increase liquidity.
1. Extend your days payable outstanding (DPO), a measure of the time it takes to pay invoices from trade creditors. To retain access to working capital for a longer time, credit-approved buyers can negotiate extended payment terms with international suppliers.
These videos describe some of the tools you can use to reduce days payable outstanding:
2. Reduce your days sales outstanding (DSO), the average number of days it takes to collect revenue after a sale has been made. To receive early payment, exporters can explore a number of financing options.
These videos describe some of the tools you can use to reduce days sales outstanding:
Learn more about ways to optimize your company’s working capital and manage trade-related risk with these additional resources.
- Video: Optimizing working capital
- Video: International payment methods
- Video: Adding value to global supply chains