Become a client

International Payments | Case Studies

International Currencies | Supply Chain | Western Union Business Solutions

How Westwell Australia overcame challenges for cash flow certainty and happy suppliers

Fast turnaround of CNH payments
Fast turnaround of CNH payments increases cash flow certainty.

Westwell Australia is the international business division of China based parent company Sumpo Group, which exports quality Australian and New Zealand food products into China. The company was experiencing challenges with slow conversion of CNH into AUD, which impeded its ability to pay suppliers on time.

Challenge
1 week process to exchange CNH into AUD was impacting cash flow.

Solution
CNH conversion within 24 hours of delivery.

Result
Cash flow certainty.


The Challenge: Slow conversion tightens cash flow

In the past, international business was conducted with China using USD currency due to the Chinese Government’s strict control of the Renminbi (RMB). After the Chinese government began to internationalize the RMB, importers and exporters outside of China can now deal in the local currency through offshore financial markets in cities such as Hong Kong. The offshore currency is known as CNH.

This has allowed Westwell Australia to provide clients with the option to pay in their local currency. Such flexibility is a competitive advantage for because it helps clients minimize their exposure to AUD volatility. In fact, the company has found that the majority of its clients prefer to pay in their local currency.

The challenge for resides in the process of converting CNH into AUD quickly enough so that it can efficiently pay its suppliers. The company generally has one week in which to receive and exchange CNH funds to pay their suppliers. Reliable cash flow is critical to their supply chain and the success of their business model.

However, Westwell Australia found that due to their internal processes, some foreign exchange providers were slow to convert CNH into AUD, which impeded its ability to pay suppliers on time. Cash flow was tight, which complicated relationships with suppliers.

The Solution: 24 hour turnaround

The need for an Australian exporter to exchange CNH is an unusual one, given China is better known as a source of imports. However, Western Union Business Solutions has been able to provide the efficiency needed to improve the company’s cash flow requirements.

After remitting CNH into Western Union Business Solutions bank account, Westwell Australia can be confident that funds will arrive in its AUD account within 24 hours. This efficiency has freed up the company’s cash flow considerably and brings peace of mind that suppliers can be paid quickly.

The Results: Smooth cash flow, happy suppliers

Cash flow is king and for Westwell Australia fast conversion of CNH into AUD leads to better relationships with suppliers. Its supply chain is built around 30 or 60 day terms of trade, and its ability to pay invoices on time is critical to maintaining these terms.

As Michelle Jin, Executive Director, Westwell Australia, concludes, "The speed and reliability that Western Union Business Solutions provides has had a positive impact on our cash flow. We’re paying suppliers more quickly than in the past and conducting business more efficiently."

Suey Cooper
Suey Cooper Founder, Sole Distribution

“It’s a real competitive advantage to offer our clients the ability to pay in their local currency. Having this currency converted into AUD so quickly, means there’s minimal disruption to our cash flow.” Michelle Jin, Executive Director, Westwell Australia

Westwell Australia can now be confident that CNH will arrive in its Australian bank account within 24 hours which helps to pay supplier more quickly and free up its cash flow.

Disclaimer: This example is for illustrative purposes only. Your results may vary.