Make Your Working Capital Work Harder€¦ · Make Your Working Capital Work Harder: Finding Hidden...
Transcript of Make Your Working Capital Work Harder€¦ · Make Your Working Capital Work Harder: Finding Hidden...
Make Your Working Capital Work Harder: Finding Hidden Value in PaymentsAPRIL 8, 2019
AMERICAN EXPRESS
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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 2
AMERICAN EXPRESS CANADA
Kristine Tsaousidis
VICE PRESIDENT, SMALL MEDIUM ENTERPRISE,
GLOBAL COMMERCIAL SERVICES
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
How American Express works with businesses
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Your Business
Your
Customers /
Franchisees
Accept Payment
by Amex
Your Suppliers
Make Payments
with Amex
American Express helps businesses benefit from both accepting payments from clients and
making payments to suppliers by having direct relationships with both
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
American Express Business Solutions
▪ Improve your cash flow
▪ Save on business expenses &
earn rewards
▪ Streamline the billing process
▪ Gain powerful insights
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▪ Accelerate client payments
▪ Reward customer loyalty
▪ Reduce the cost of receivables
management
▪ Transfer credit risk to American
Express
▪ Offer a consistent payment
experience
PAYMENT
SOLUTIONS
RECEIVABLES
SOLUTIONS
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
Only 16% of SMEs are ‘very satisfied’
with current financing options
Sources of Financing
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Existing
Working
Capital
Traditional
Banks
Partners
Unsecured
Credit
Supply
Chain
Financing
P2P
Investors
Crowd
Sourcing
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
Key Strategies
▪ Turn your Accounts Payable
(AP) & Accounts Receivable
(AR) into Working Capital
▪ Work with Your Suppliers
▪ Flexible Incentives/Rewards
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This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 7
Leverage both payables and receivables to extend days cash on hand
Turn AP & AR Into Working Capital
Days Cash on Hand Extended
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
$13,699
$68,493
$205,479
$410,959
$616,438
1
5
15
30
45
Amex Cash Flow Benefit of Extending DPO
$959
$4,795
$14,384
$28,767
$43,151
1
5
15
30
45
Savings on Benefits with DPO Extension
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Annual Program
Size of $5M
Days
Assumed
WACC 7%
Days
When p
ayable
s e
xte
nded
by
Benefits of Working Capital Management
Extending payable days up to 45 days can unlock $616K of cash flow within a year. Through this, a company can benefit up to
~$43K in interest savings without raising cost of borrowing or negatively impact their financial position on the books.
When p
ayable
s e
xte
nded
by
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 9
Franchise Ecosystem: Decentralized Buying Group
FRANCHISEE
SUPPLIER
FRANCHISOR
SUPPLIER
ProductProduct
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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE. 10
Franchise Ecosystem: Centralized Buying Group
FRANCHISOR
FRANCHISEE
CENTRALIZED BUYING GROUP
Product
Product
Product
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American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
Optimize Supplier Relationships
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Optimize
Payment Terms
Loyalty Consolidate
Spending
This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
Flexible Incentives & Rewards
▪ Spectrum of Benefits:
– Rewards on business
spend
– Travel & entertainment
benefits
– Offset expenses
– Improve DPO/DSO
– Optimize financial metrics
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This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without
American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE.
Recap of Strategies
▪ Find Working Capital in Your
Balance Sheet
▪ Work with Your Suppliers
▪ Leverage Incentives/Rewards
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Thank you
Questions? Let's Connect!
Visit us at booth #108
Email us at [email protected]
Or visit us online at www.americanexpress.ca/canadianfranchiseassociation
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