Supply Chain Management

Financial flow is an important flow in any supply chain. Streamlining the financial flow can provide the firm opportunities to increase the efficiency of the supply chain, and improve its profitability.

In this chapter, we examined the two key components of the financial flow in a supply chain: purchase-to-pay process and order-to-cash process.

Purchase-to-pay process consists of financial transactions with the suppliers and order-to-cash process consists of financial transactions with the customers. We also discussed the automation of financial flow in a supply chain. There are many IT solutions that can be used to streamline the financial flow in any supply chain.

Prominent among them are the EIPP solutions, electronic trade financing systems and credit information and management systems. Finally, we discussed the ways to integrate physical and financial flows in a supply chain.