Finance executives focus on supplier relationships

17 December 2010
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17 December 2010 | Lindsay Clark

Almost three-quarters of senior finance officers have reported that supplier relationships are a corporate priority.

Seventy-three per cent of the sample, 168 senior finance executives, from firms with average annual sales of about $5 billion (£3.2 billion), agreed that supplier relationships are a top priority, the study by CFO ResearchServices found.

It discovered 81 per cent are focused on working capital, and they recognised that two of the most effective methods of influencing this vital business metric are related to working with suppliers: inventories and accounts payable.

As a result of the focus on supplier relationships, 82 per cent have either deployed supply chain finance or are considering doing so. A total of 78 per cent said supply chain finance helped strengthen relationships with suppliers, 72 per cent said it had also helped improve working capital efficiency.

“This study reveals critical challenges faced by senior finance executives and their perceptions of the role supply chain finance plays in strengthening supplier relationships and managing working capital,” said P J Bain, chief executive of finance software supplier PrimeRevenue, which sponsored the research.

In June, research firm Gartner advised that procurement and finance teams need to work more closely together to benefit from software which links supplier relationships to cash management and invoicing systems.

A feature in the winter issue of CPO Agenda concluded a common language was needed between procurement and finance to help their relationship.

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