The Chinese New Year celebration is one of the most important and most widely celebrated holidays in the country. For exporters and manufacturer's of consumer goods that sell to retailers in the U.S. and beyond, this holiday means a potential 4-week shut down in the manufacturing and shipping of their products, as factories close shop to allow their workers to go home and celebrate with their families.
In 2013, the New Year is much later than it has been in the past – beginning on February 10, 2013 – which is a welcome relief for many that manufacture their products in the country. However, without the proper planning and the right type of financing in place, many may experience trouble ensuring that their spring goods are made and shipped before the impending shut down.
One thing is for certain – the faster you can pay your suppliers the more flexibility you have when working with them and the more assurance you have that your goods will ship and be completed when they need too. We have helped businesses like AH Schreiber get longer trade terms, while at the same time, pay their manufacturer upon shipment for goods utilizing CBC’s Supplier Early Payment (SEP) Program.
Here are three tips to develop a plan to ensure that your financial relationship stays healthy with your suppliers during the New Year:
1) Understand your manufactures holiday schedule and develop a timeline that ensures orders are paid for and shipped prior to the holiday
2) Work with a financier to get longer days payables outstanding while providing a liquidity solution to your suppliers
3) Plan ahead so you avoid inquiring about seasonal over advances or credit line increases from your bank