Scoring and pouring — cash flow keeps spirit business growing

Football branded vodka becomes overnight hit among U.K. sporting fans, but how does this small company manage to keep up with a 500% increase in demand?

C2FO customer, Bohemian Brands, is a U.K. spirit business that works with some of the top sporting clubs in the U.K. to create branded drinks. After a successful test run during the holiday season, Bohemian Brands experienced a surge in demand as their product quickly gained popularity. To be precise, the company surpassed their sales forecast by 80,000 units. This sudden 500 percent spike in demand could make or break their business.

For Bohemian Brands, keeping up with the demand spike was an issue because of limited cash flow. However, with the help of C2FO, they could accelerate their approved invoices in return for a discount they choose, giving them access to the necessary working capital to meet demand. “The invoices would be live on the online portal. We could set our term and our APR and receive an answer within a couple of hours by the end of the day” said Julian Piler, Director of Bohemian Brands. To use C2FO, suppliers simply log into their portal, choose which available invoices they want to discount and at what rate, and get paid directly from their customers. There are no fees or contract re-negotiations, and the supplier maintains complete control over their cash flow.

The C2FO solution is featured in a film programme called Credit Champions, created by The Chartered Institute of Credit Management (CICM) and ITN Productions. The programme, introduced by national newsreader Natasha Kaplinsky, explores the impact of liquidity across the supply chain and how healthier cash flow supports the growth of businesses and the economy. The chapter dedicated to C2FO highlights how Bohemian Brands uses C2FO to access affordable working capital to keep up with growing demand.

Bohemian Brands’ spike in business was an unexpected bonus, but nearly half of SMEs in the U.K need more liquidity compared to 2017, according to the recent C2FO Working Capital Outlook Survey. Unfortunately, not all SMEs have access to affordable liquidity to quench their thirst, meaning their need for liquidity may outpace access to funding.

“SMEs are the engine room of growth for the U.K. But worryingly, the U.K. has started to lag behind other developed economies in that the proportion of GDP generated by SMEs is reducing compared to our peers,” said Colin Sharp, SVP EMEA at C2FO. “Since inception, we have requested 150bn in early payments for small or medium sized businesses that are using that cash to fuel their growth, employ people, stay in business, and become the engine room of growth for the U.K. economy,” he continues.

The number of clients imposing longer payment terms on their SME suppliers doubled in the past year in the U.K., reports the Working Capital Outlook Survey. Late payments negatively impact SME cash flow, hindering business growth, and on a greater scale, the economy. To help solve this issue, the U.K. government implemented the Prompt Payment Code (PPC) and the Duty to Report (DtR), which requires large corporates to publicly report details on payment terms and practices towards their SME suppliers.

C2FO is a supporter of the Prompt Payment Code in the U.K. “The U.K. government recognises the value of C2FO. If the suppliers are paid early using the marketplace, that gets positively recognised as part of the Duty to Report requirements,” said Matt McQuillan, Director of Business Development at C2FO. However, suppliers are not the only ones who benefit from the C2FO platform: corporates are able to lower their costs while remaining compliant with the PPC and DtR.

The Credit Champions programme premiered on 15 March 2018 at the Credit Summit in London. “We welcome the engagement of C2FO in this genuinely important and ground-breaking programme that looks to project credit management – and the work of the wider credit industry – into the minds of business owners, leaders, and politicians throughout the UK,” said Philip King, CICM Chief Executive. “C2FO is an essential part of the credit community and plays a key role in driving best-practice and achieving high standards of excellence for its customers.”

Suppliers can learn more about C2FO here. 

About the Chartered Institute of Credit Management: The Chartered Institute of Credit Management (CICM) is the largest recognised professional body in the world for the credit management community. Formed over 75 years ago, the Institute was granted its Royal Charter in 2014. Representing all areas of the credit and collections lifecycle, it is the trusted leader and expert in its field, providing its members with support, resources, advice and career development as well as a networking and interactive community. For more information visit: www.cicm.com

About ITN Productions: ITN Productions is ITN’s bespoke production hub producing creative and commercially valuable content for the corporate, commercial, broadcast and digital sectors. Industry News forms part of this offering and is a communications tool for leading industry bodies and national associations produced in a broadcast news programme format, including interviews, news-style items and sponsored editorial profiles. For more information visit: http://www.itnproductions.co.uk

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