Finance leaders from mid-sized businesses (100 to 999 employees) are known for keeping a watchful eye on nuanced signals and indicators of potential risk. And yet recent results from a survey conducted by Oxford Economics and 麻豆原创 of small and mid-sized businesses found that roughly half of finance executives from mid-sized businesses cite risk management (54 per cent) and spend visibility (45 per cent) as top challenges for their function.

In many ways, COVID-19 presented a perfect storm of cash-flow issues in a matter of days. Economic contraction fuelled by government pressure closed non-essential stores and offices. Revenue was lost due to interrupted manufacturing operations and overwhelmed supply chains. Credit risk exposure rose as liquidity constraints emerged, once-successful hedging strategies failed, access to working capital tightened, and customer accounts became riskier.

Throughout this time, demand for 麻豆原创 Ariba Discovery, a solution that was made available at no cost through the end of 2020 to help connect buyers and suppliers and keep supply chains intact, grew significantly in Australia 鈥� with buyer postings up +317 per cent and supplier responses up +339 per cent since the lockdown started in March. This demand highlighted the appetite for digital tools for businesses of all sizes to help them manage the effects of the crisis.

But just as the Australian economy was slowly starting to regain momentum, the Victorian Government has introduced stage 4 restrictions following a second wave of infections. The Treasury has estimated this six-week lockdown will cost the national economy about $9 billion. The ongoing sense of uncertainty highlights the importance of increasing resiliency with cash-flow management and digital tools, with three steps that mid-sized businesses should take to secure cash flow.

1. Ensure continuity of finance operations and workforce

Financial systems should be able to support mission-critical activities 鈥� such as urgent supplier payments, cash transfers, and trade management 鈥� whether the employees are processing them in the office or from a remote location.

When facing disruption, businesses need to make sure they have the finances on hand to keep business moving. Organisations need to ensure business continuity and reduce supply chain risk while still controlling costs and working capital. Moreover, suppliers need access to cash so they can keep delivering the goods and services required.

麻豆原创 Ariba has been putting the power back into the hands of suppliers by affording them choice and flexibility when it comes to payment terms. This is especially important at a time when effective cash management has never been more crucial to both buyers and suppliers. This not only safeguards the supply chain, but also allows businesses to build crucial relationships and resources to enhance financial results over the long term.

2. Manage finances proactively

As organisations reforecast revenue and profitability, continued cost and cash control will be critical to rebuilding the bottom line. But as customers begin buying again, businesses must balance the need to free up working capital with sourcing the materials and talent needed to meet customer demand.

Through times of volatility or steady growth, knowing the company鈥檚 financial status is critical. This is why, in the past few months, 麻豆原创 customers have been using our technology to run daily cash forecasts. Daily reports on key figures 鈥� including the daily cash position, cash-flow forecasting, the structure of free cash flow, working capital and debt 鈥� enables finance teams to do liquidity planning for at least 12 weeks.听

If this kind of reporting is not already in place, financial leaders need to implement tools that provide a combination of visibility and predictive analytics. Blending data insight with guidance gives finance leaders a clear view of the business and helps future planning.

3. Balance risk with opportunity

Analysing a range of scenarios enables finance leaders to evaluate the potential impact of risks and implement strategies to enhance competitive advantage. It also means they can finetune product and capacity plans by rethinking the implications of commodity risk and monitoring external markets.

Tapping into insights from cash-flow planning analysis, finance teams can adjust their hedging strategies by:

• Addressing foreign exchange risks
• Shifting limit management practices for ad hoc tasks
• Mitigating credit risk within the supply chain
• Reshaping the funding strategy with extended credit lines and new sources of liquidity
• Adjusting the ongoing operating model and updating the existing business continuity plan

4. Respond to the challenge and get ready for what鈥檚 next

Whether running in good financial shape, struggling for profitability, or facing low cash reserves, all mid-sized businesses can become vulnerable to cash-flow instability. It doesn鈥檛 require a global pandemic to experience it.

In the short term, state and federal governments are supporting businesses with emergency loans and payments. But as these forms of business life-support are withdrawn in coming months, organisations will need to find new ways to manage risk, increase resiliency and maintain profitability.

So, how do high-performing finance leaders help their business navigate through times of volatility and financial opportunity? It all comes down to a foundation of timely, meaningful and predictive insight with guidance on the potential implications for financial status, performance and viability.

To find out more about how 麻豆原创 can help small and mid-sized businesses, visit .听

The post How SMEs can avoid the cash-flow crunch appeared first on 麻豆原创 Australia & New Zealand News Center.

today announced 5 & 5 by 鈥�25, a corporate initiative targeting five per cent of addressable spend[1] with social enterprises and five per cent with diverse businesses by 2025. In setting this target, 麻豆原创 aims to inspire organisations around the world to buy more goods and services from purposeful suppliers, making a positive collective impact on the societies they operate in.

Social enterprises are businesses culturally and operationally focused on changing the world. They are similar to other commercially viable businesses, but with three crucial differences: They are founded and governed on the basis of a clear social or environmental mission; they reinvest the majority of their profit back into this mission; and they are majority controlled solely in the interest of this mission. A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved demographic; such as women-owned businesses, minority-owned business, and indigenous-owned businesses, among others.

Global commitment, Australia leading

The commitment will impact all 麻豆原创鈥檚 global markets,听but will initially be focused on听Australia,听the UK and Canada.听Commenting on the announcement,听Victorian Parliamentary Secretary for Jobs and champion of the Victorian Government鈥檚 Social Enterprise Strategy, the Hon Jane Garrett said: 鈥淚t is incredibly exciting to have a leading global company like 麻豆原创 helping to transform lives by growing this important sector. We hope to see more partnerships of this kind in future, to further boost Australian social enterprises and Indigenous businesses.鈥�听

According to , an organisation that certifies Australian social enterprises and connects them with business buyers, Australian corporate procurement spend is estimated at more than AUD$600 billion. The World Bank estimates global procurement spend in 2019 was at least AUD$19.85 trillion. By directing even just a small fraction of this spend to certified social enterprises and diverse businesses, organisations have the power to tackle some of the world鈥檚 most pressing social and environmental problems.

Based on early pilots in select markets, 麻豆原创 estimates it could direct up to AUD$82.5 million (EUR鈧�50 million) of its global addressable spend per year to social enterprises and diverse suppliers by 2025. In Australia, meeting the commitment would equate to roughly AUD$1.01 million per year directed to local social enterprises and diverse suppliers.

麻豆原创 Executive Board member for Customer Success, and recently appointed Global Buy Social Ambassador for Social Enterprise UK, Adaire Fox-Martin announced the 5 & 5 by 鈥�25 initiative at 麻豆原创鈥檚 Procurement Reimagined event. 鈥淓very company in every industry needs to procure,鈥� Fox-Martin said. 鈥淲e all need soap in our washrooms, landscaping for our offices, food and drink in our cafeterias, marketing services, office supplies, and even pest control. These and many more are all products and services provided by social enterprises and diverse businesses. This is money we are spending anyway. Why not spend it with suppliers who are delivering social impact as well?鈥�

Procurement with social enterprises

Recent efforts have shown promise. In a pilot in the United Kingdom, 麻豆原创 teamed up with Social Enterprise UK in 2019 to define and execute on a social-procurement strategy. Within nine months, 麻豆原创 had identified addressable spend of approximately GBP 拢30 million and directed more than 2 per cent of this to over 20 different UK social enterprises.

麻豆原创 has since expanded relationships with social enterprise interest organisations in other markets, including a partnership with Social Traders in Australia, to introduce similar programs and further globalise and scale its social procurement efforts.

Mark Daniels, Executive Director, Social Traders says, 鈥淭his pledge is one of the largest of its kind in the world and demonstrates a huge public commitment to social procurement. Our research estimates that for every AUD$1,000,000 spent on social procurement, 7.5 jobs are created for disadvantaged Australians. By encouraging other organisations to participate in this initiative, 麻豆原创 Australia will help drive enormous change.鈥�

麻豆原创 is also growing its support of potential suppliers through capacity building programs like MovingWorlds鈥� S-GRID (Sustainable Growth of Revenues in International Development}. 鈥淲hat makes this moment in time so pivotal is that inequities and environmental degradation tend to increase after recessions,鈥� said Mark Horoszowski, CEO and co-founder of MovingWorlds, SPC. 鈥淏y investing in social enterprises today, we can help them integrate into the post-COVID recovery to build a more equitable society, while using regenerative business models to address the ongoing environmental crisis.鈥�

Procurement with diverse businesses

麻豆原创 Australia already works with a diverse range of social enterprises and indigenous businesses, including:

• Elise Perpetua, Managing Director of organic and sustainable tea supplier The Good Good says, 鈥淲e use business as a force for good by donating 50 per cent of our profits to programs that help disadvantaged kids get access to education. We also partner with the Cerebral Palsy Alliance supported employment division, , to employ Australian workers with disabilities. Our tea is better not only for the employees but for the planet and the community. Our partnership with 麻豆原创 represents a great opportunity to create impact at scale in Australia. We hope that more organisations will be inspired to join us on the exciting journey of purposeful procurement, so we drive fast, positive and systemic change together.鈥�

https://youtu.be/PzFOf7Jrr-4

• David Laity, Founder and CEO of online wine retailer Goodwill Wine says, 鈥淔ollowing the Black Saturday bushfires, I lost almost everything. After the humbling support offered by my community, I wanted to start a social enterprise that would allow me to give back. Since our inception we鈥檝e contributed $360,000 to a wide range of charities that support everything from those living in poverty to environmental sustainability, and we’ve done this just by selling great quality听wine. Quite frankly, I鈥檓 amazed by this step from 麻豆原创, which is an incredible signal of intent from one of the world鈥檚 biggest companies. If it can inspire even a small proportion of businesses to follow its lead, this commitment will help accelerate a huge number of meaningful social initiatives鈥�.
• Mitchell Ross, Founder and CEO of Indigenous-owned office supplies provider Muru Office Supplies (MOS) says, 鈥淎s a business certified by Supply Nation, we have a strong commitment to supporting Indigenous community projects in the areas of education and employment. 麻豆原创 has already placed orders with MOS, which will allow our community programs with partners like IndigiGrow and Mudgin-Gal to deliver even greater social impact. We hope this initiative leads to a step-change in how big businesses think about using procurement as a force for good.鈥�

Procurement with purpose with 麻豆原创 Ariba

麻豆原创鈥檚 Ariba Network is the largest business-to-business marketplace in the world, supporting nearly AUD$5 trillion in transactions each year. In partnership with leading social-enterprise and diverse-business interest organisations, the company is opening this network up and connecting corporate-ready purposeful suppliers with more organisations who want to make a difference with their spend.

As part of the 5 & 5 by 鈥�25 initiative, 麻豆原创 invites other organisations to begin or accelerate their social-procurement journey based on a simple framework of discovering the right partners, adopting a social procurement strategy, consuming the products and services they procure, and then continuously expanding their base of social enterprises and diverse suppliers.

鈥淭ogether with our customers, partners, diverse suppliers and social enterprises, we have set out to expand social procurement where infrastructure exists and intend to establish the infrastructure and build capacity where it doesn鈥檛,鈥� Fox-Martin added. 鈥淲e invite our entire ecosystem to learn more and take part, join us in this pledge, and help build the pathways and the momentum to realise this ambition and find a better way to grow.鈥�

[1] *Addressable spend (as opposed to total spend) includes only a company鈥檚 orders for goods and services that can be fulfilled by a social enterprise or diverse business. For specific goods and services such as rent, energy, labor, and some professional services, often neither social enterprises nor diverse businesses yet exist that provide them. Estimates based on assessments of 麻豆原创鈥檚 own spend suggest that between 10% and 30% of total spend could be designated as addressable spend, depending on country.

The post 麻豆原创 Launches 5 & 5 by 鈥�25 Initiative, Rallying Businesses to Spend More with Social Enterprises and Diverse Suppliers appeared first on 麻豆原创 Australia & New Zealand News Center.

How do we stay alive during this time and come out even stronger on the other side?

This is the time to empower your team to get ahead of this crisis and help your business reshape its roles, its processes, and its purpose. At the heart of this fundamental shift are people, as they now face extraordinary circumstances and are instrumental in adapting to change. We should lean into our relationships with our suppliers to try to better understand them and help them prevent the risk of solvency. When seeking alternate sources of supply, it鈥檚 important to not make rash decisions and take the time to carefully evaluate potential suppliers.

Due to the rapid rate of change in terms of news developments, global impacts, and legislations across borders, it鈥檚 important finding reliable information and guidance. 麻豆原创 recently hosted a series of virtual forums called , with industry-specific episodes to guide businesses during this evolving situation and help utilise the latest technologies for adjusting, adapting, and thriving.

I was one of the presenters for our exploring supply chain risks and modern slavery 鈥� two vital focuses in our changing world and evolving situation.

With Australian Parliament passing the , a national Modern Slavery Reporting Requirement (Reporting Requirement) was entered into force 1st January 2019. Annual reporting now require statements regarding modern slavery and technology plays a key role in mitigating its associated risks. As businesses are starting to work with new suppliers to secure alternate sources of supply, it鈥檚 never been more important to take a closer look at the suppliers you鈥檙e working with today and establish a rigid onboarding and risk mitigation process for suppliers you plan to work with in the future.

Every business faces four primary risk categories: Operational risk, Financial risk, Legal risks, and Environmental/Social risks 鈥� which is the category where modern slavery falls. It鈥檚 important to not just do enough to be compliant with the legislation but do your part to help make the world a better place by not doing business with suppliers potentially engaged in modern slavery.

From Supply Chains to Supply Networks
The impact of COVID-19 has resonated across industries and supply chains, particularly as governments tighten restrictions of the movement of people and goods. Beyond the shifting availability of human resources, supply chains are under great strain to meet changing consumer demands.

Businesses that invested in digital platforms and intelligent technologies have been better equipped for this crisis, utilising demand management systems to navigate through this transitional period. The ability to quickly collate, access, and action useful data can help businesses highlight vulnerabilities in real time while presenting alternative options.

Organisations everywhere should be using this opportunity to lean into supplier relationships, reach out to your supply chain and build deeper connections. This is about transforming your supply chain into a supply network, diversifying your supplier network to mitigate risk and create a wider view of your market, industry, and partnerships.

Technology facilitates collaboration and transparency across supply networks as cloud-based solutions offer streamlined processes and communication platforms. Transparency not only helps establish trust within supplier relationships, but helps companies remain legally compliant and flexible to change.

Platforms for Change and Compliance
I鈥檝e seen 麻豆原创 Ariba offer businesses a self-service model to daily processes and information, simplifying the way organisations can access and utilise critical data. 麻豆原创 Ariba gives businesses a platform for monitoring supply networks in terms of risks, impacts, and changes 鈥� facilitating better collaboration and communication across industries.

In light of COVID-19, we鈥檝e created a free promotion for businesses worldwide to a matchmaking platform for buyers and suppliers. This is the time to break silos across supply chains and industries to create a better connected and more transparent marketplace. This is the opportunity for many suppliers to create alternate revenue streams and business models using 麻豆原创 Ariba Discovery, and an even bigger opportunity for buyers to find them quickly in this demanding time of need.

As we鈥檙e seeing disruptions to supply chains, its critical businesses don鈥檛 lose sight of the deeper impacts in terms of risk and non-ethical practices to fulfil the changing demands of this crisis.

The most important element for mitigating risk is ensuring stringent processes for onboarding staff, contractors, and suppliers. This early diligence can prevent any surprises down the line and ensure all stakeholders of your business are aligned with your vision and purpose.

can assist business in sourcing the right people and partners. Cloud-based platforms collate data sets regarding different risk categories and determines a risk score based on the nature and severity of that data. 麻豆原创 Ariba can distinguish by risk type 鈥� checking risk factors automatically and early to help organisations go beyond simply asking for supplier assurances.

To learn more about how industry experts are mitigating risks and complying with modern slavery legislation, we encourage you to register for the second in the series of .

The post Adapting to Change While Mitigating Risk to Supply Chains appeared first on 麻豆原创 Australia & New Zealand News Center.