The continuing advance of technological tools to aid with monitoring and forecasting puts working capital optimization techniques in reach of more companies.
Dedicated software can generate forecasts that are based on real-time data, an improvement over traditional spreadsheets that are not updated in real time. Invoicing and payment apps can automate the billing and collection processes that in the past required more time and human touch.
Truist offers access to a variety of wholesale payment tools, allowing for convenient processing, consistent security and compliance, and quick reporting and data insights. Straight-through processing, for example, automates transactions all the way from initiation to settlement. Real-time updates on payment and transaction status allow you better visibility into your process, which can help you plan more accurately.
Implementing such tools effectively can be an investment of both time and money. Your Truist relationship manager can help you evaluate the options and plan for putting them to good use.
Tapping into supply chain financing
If the current economic recovery continues in 2025, it may present opportunities for companies to make use of more specialized financing opportunities that free up cash for other uses. Supply chain financing is an arrangement whereby supplier invoices are paid by a financial institution such as Truist Securities and then repaid by the buyer at terms that are determined by the buyer’s creditworthiness.
In a recovering economy, demand for goods is typically increasing, but suppliers may not have had time to fully replenish reserves. With inflation fears easing but the impact of new policies uncertain, it’s possible interest rates will continue to fall in 2025, but not necessarily at the pace liquidity-hungry companies would like. Supply chain financing offers an opportunity to tap favorable rates to meet heightened demand.
The availability of liquidity at favorable interest rates can free up capital for growth with the added benefit of flexibility for both suppliers and their customers. With good credit, a business may be able to stretch out payment terms or secure a better rate, while the supplier is still getting its bill paid on time.
Financial crisis recovery
While there’s a lot in flux in 2025, there have been previous similar periods of uncertainty that demonstrate how companies can use cash-flow strategy to react. Most recent is the recovery from the financial crisis that started in 2008, which halted economic growth and forced interest rates down to zero.1
As the economy slowly recovered, interest rates stayed low, providing companies access to cheap debt for growth, which allowed them to conserve their cash to fund operations. The continued sense of uncertainty around macroeconomic conditions encouraged adoption of modern cash flow forecasting tools, and more firms experimented with different strategies.
For example, Coca-Cola chose to ramp up bond offerings in the post-2008 era, borrowing at rock-bottom rates to fund growth, which allowed it to conserve cash for operations.2 Over the course of nearly a decade, it also sold off its capital-intensive, low-margin bottling operations to franchisees. This shrank the size of the overall business but improved operating margins and cash flow,3 allowing the company to conduct product research and expand its markets.
In the current economic cycle, interest rates hit levels not seen since 2007, although rate cuts started in the second half of 2024. What opportunities and challenges arise as a result will become clear soon enough, but 2025 promises to be full of change on many fronts.
Companies in every lifecycle stage can meet their cash-flow challenges through the use of real-time tools, modern working capital strategies, and creative financing techniques. Your Truist relationship manager can regularly review your cash flow strategy to ensure it accounts for evolving economic conditions and industry trends.
