Early Payment Program Fuels Supplier Growth
By 5 minute read• Published February 10, 2020 •
Supporting suppliers is a top priority for Danish shipping company DFDS. That’s why they offer early payment to their hauliers across the U.K. via supply chain finance. For some, early payment gives them the fuel they need to hit meaningful growth milestones, like adding more drivers or investing in new trucks. For others, it enables them to take control of their cash flow. No matter how suppliers use early payment, supply chain finance strengthens relationships and promotes a healthier supply chain for all.
Watch this video to hear how real suppliers use early payment to grow and transform the business.
When you’re running a vehicle and it’s using anything from £1200 to £1500 a week in diesel alone, before your other outgoing costs, it’s very difficult. When you’re initially starting off, you can’t be waiting 30 days for your money. [Robert] then introduced me to you guys, PrimeRevenue, then all of a sudden, I’m working a week and then the following week, my money’s in the bank.
I’m Robert Thompson. I’m the Haulage Procurement Manager for DFDS in the UK. As I said, I’m a great advocate of the platform and the actual system. And we’ll try and push it out with as many hauliers as we possibly can. And this is potentially a great scheme for building the relationship with your suppliers and developing a basis on which they can benefit, as well as DFDS benefiting from cash flow. Because at the end of the day, that is what PrimeRevenue is primarily about.
My name is Anne Rømer, I’m the logistics divisional CFO. There was a constant drive from our big industrial customers that they pay us later and later. So, that basically meant that we needed to find a solution to balance our cash flow in a different way. There was a high degree of flexibility from the supplier side, and we have suppliers that we would like to onboard on such a program, of very different size, different geographies. So we have quite complex requirements. It’s a true win-win situation for them and for us.
The supply chain finance we’re offering to our subcontractors is offering us opportunities to do more with those hauliers that we’re already working with, enabling us to grow our fleet in the UK and make the consistency of our haulage more sustainable. Once we get these guys on board, then there’s more incentive for them to stick with us. Also we do hear about them growing their business on the back of their quicker payments, which they get through PrimeRevenue. I get a lot of positive feedback about the system and particularly the cost of the system, which all the hauliers have said is very competitive compared to your major banks and other lenders. At the end of the day for these guys and for most businesses, cash flow is king. So the quicker they get their money, the quicker they can reinvest in their business and the more viable their business becomes.
It was just a really easy process, I knew exactly what it was going to be doing for me, for the business. The platform allows you to pull money off as and when you need it. You can have the money immediately on a fixed term, and as I explained to Rob before, we have a flexible term. So we pull money off as and when we need it, all depending if we need to buy anything or we need to invest. We’ll just pull money out the platform and use it. Cash is king, isn’t it, for any business. So we’re able to use that inflow of cash to buy things and to expand. This platform helps us to be able to do that, because we can call for the money anytime we need. And as much as we need, or as little as we need.
It’s quite smooth. I got paid my last payment of DFDS direct from Rob Thompson on the Friday and then literally seven days later got my payment off PrimeRevenue, no problems at all.
We started with DFDS with three trucks. After we started the cooperation with PrimeRevenue and DFDS, we grew our freight within only three months to 25 trucks. That was the biggest step ever, that Brit-Pol made with DFDS and PrimeRevenue.
I say get on it straight away, seriously. Unless you’re a multi billionaire and you’re not really bothered, I would get on it, straight away. It was really helpful.
I would personally turn around and say, “Do it.” Especially if you’re a small business who wants to get a little bit bigger, or even larger, then yeah, go ahead and do it.