The economic landscape has changed drastically over the last 2 years and trends in the industry continue to change heading into 2022. This means that we need to adapt and transform according to the way the world is changing so that we can remain innovative and continue bringing our award-winning solutions to more businesses. As we kick off the new year, we’re taking a look at the upcoming trends in the industry and how Addendum plans to tackle the year as a platform of possibilities.
Trends and forecasts for 2022
Working capital continues to be a major focus for businesses of all sizes this year. Over the last 12 months, many companies have seen a dramatic increase in the cost and turnaround times to ship, clear and transport goods from suppliers. As a result of this, companies are localising procurement where possible or choosing to hold more inventory to ensure they do not lose sales due to a lack of inventory. Supply chain challenges will continue to put pressure on working capital in 2022, along with the expected recovery in general economic activity, post-Covid.
The simplest way to counter-balance an increase in inventory levels is through the negotiation of longer payment terms with suppliers, in other words, an increase in creditors days. This would have a positive impact on working capital ratios. However, this is easier said than done. It is, however, significantly simpler to achieve for companies with established supply chain finance programs and partners with the skills and experience to assist in payment term negotiations. Supply chain finance offers suppliers a simple, online working capital solution to mitigate any impact longer payment terms might have on a supplier’s business.
South African companies with existing supply chain finance programs have set very ambitious working capital targets for 2022 and will continue to successfully generate working capital, as well as take costs out of their supply chains. In an effort to adapt to the new landscape, many other companies are currently investigating implementing supply chain finance programs to provide some of the working capital required to generate growth. All in all, supply chain finance is on the rise in 2022 as a major solution for South African companies.
Addendum growth and mission for 2022
Addendum has seen enormous growth in supply chain finance programs, particularly since the beginning of the Covid-19 pandemic. As such, our business has simply flourished and more than doubled in size in this period. It’s clear that there is a huge demand for affordable trade finance and especially supply chain finance thanks to the simplicity and functionality of Addendum’s product.
We are continuously looking for ways to grow, innovate and provide value to our clients. Our mission for 2022 includes expanding the Addendum footprint in South, East and West Africa. We aim to educate as many clients and banks as possible about the benefits and win-win nature of supply chain finance, and how this can help them in the current economic climate. We also aim to help more of Addendum’s supplier clients to fund debtors or invoices that are not being funded on our platform currently.
2022 is shaping up to be a year of hope and positive change. We intend to use this year to springboard the company further into the goals we have set our sights on, and ride the wave of positive change by showing businesses how supply chain finance can help them achieve their objectives.