Nufin Data – Early Payment Discount (EPD): How can it benefit both pharmaceuticals and suppliers?
The pharmaceutical industry in Singapore has gone through a lot of rough patches. On December 2017, a total output of manufacturing growth was down by 3.9%. Manufacturing growth for pharma in Singapore was it its worst in decades, prompting the industry to recover in the following year.
However, the following year was looking optimistic. 2018 was expected to be a big year for pharma-manufacturing in Singapore. Last year was predicted to be a slow but steady recovery path for pharmaceutical manufacturing in Singapore. Fortunately, the predictions came true. Pharma-manufacturing in the country received a gigantic $34 million boost to help prepare or the economy’s future.
The generous improvement helped shape pharma manufacturing in Singapore, allowing more lives to be saved with more efficient production of drugs.
Singapore’s pharma industry is looking well as of now, thanks to its recovery during the past few months. There’s no denying that the pharma-manufacturing industry plays a small but significant portion of Singapore’s gross domestic product by contributing over 3 percent.
Still, with everything that’s happened, it’s wise to remain vigilant with the ever-changing flow of pharma manufacturing. One good way to significantly improve business flow for pharmaceuticals and suppliers is to provide Early Payment Discount (EPD) services.
Why Early Payment Discount?
With approximately 7,000 people employed in the pharma industry, there’s a combined output of around $17 billion worth of supplies for international markets. It would be wise to let the industry stay this way (or better yet, improve) by utilising supply chain financing methods such as Early Payment Discount.
EPD is an active way to minimise potential late payment, which in turn will increase customer loyalty and maximise profits. There’s also the high chance of improving supplier/manufacturer relationships.
If Early Payment Discount is incorporated smartly in supply chain financing, it can provide a handful of benefits.
Early Payment Discount benefits
The effects of EPD are almost limitless as it covers all the parties involved. There are mutual benefits for both the supplier and the buyer.
For the supplier, cash is will return to business faster, which will also provide extra liquidity. This will reduce the risk of late payment and bad debt. There’s also the chance of gaining customer loyalty if they see your EPD offers as an incentive. If the supplier wants to avoid wasting time by chasing payment, EPD is the ideal solution. This will encourage the buyer to pay on time.
As for the buyer, there is the benefit of improved profit margins. Early or on-time payments should strengthen profile and credit report. The buyer should ensure the supplier with a steady flow of capital, lessening supply chain risks.
Offering EPD is beneficial, especially in the pharma manufacturing industry. Manufacturers and suppliers will have more stable cash flow with EPD in their utility.
Know more about supply chain financing and its many benefits. Nufin Data can provide you with more insight and knowledge regarding expert solutions in the world of supply chain.