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Cash Management

Maintaining profits through detailed analysis

Danish by Design can easily analyse its exposures and ensure it has the right strategy in place to protect margins.

Danish by Design is a growing wholesale importer of stylish, modern nursery furniture and infant products. The company works with seven suppliers across Europe, and sells to clients that range from private nurseries to large retail chains. Danish by Design was unable to change pricing based on currency fluctuation without impacting customers who promote RRPs in advance. It required a solution that allowed it to forecast with more accuracy to help protect profits.

Challenge

Inefficient manual process for monitoring currency exposures

Solution

Online platform provides convenient and detailed cash management capability

Result

Clarity around exposures helps to protect profits



The Challenge:

Manually managing exposures and profits

Danish by Design is a growing wholesale importer of stylish, modern nursery furniture and infant products. The company works with seven suppliers across Europe, and sells to clients that range from private nurseries to large retail chains.

Exchange rates are critical to the business’ profitability. The time between raising a PO and receiving payments can vary from three to six months. Meanwhile, some suppliers require advance payment and others offer 90 day terms. Danish by Design is unable to change pricing based on currency fluctuation without impacting customers who promote RRPs in advance.

Previously, the company relied on a yearly planner to manually track POs, invoices and Forward Contracts. After setting a budgeted rate required to maintain gross profit, Danish by Design aims to hedge half its outgoings every six months. Invoice dates were manually highlighted against outstanding Forwards to identify potential exposure to losses.

Nigel Rose, Managing Director, Danish by Design, elaborates, “We had a fairly reliable at-a-glance visual of our exposures and would top up Forwards as needed to maintain margins. But managing the planner was manual, time consuming and didn’t allow for detailed analysis.”

Danish by Design wanted a faster, more convenient way to track invoices and access to detailed data that would help the decision making process.



The Solution:

Taking invoice management and analysis online

Enter the WUBS Cash Management Module. This online tool simplifies invoice management, and provides full transparency of FX exposures to help forecast cash flow and assist with risk management decisions to help protect margins.

After entering PO and invoice data, it’s easy to configure a detailed overview of outstanding Forward Contracts, and upcoming and historical payments sorted by date, invoice number or currency. The platform provides a snapshot of projected exposure through a summary of hedged and un-hedged totals, as well as aggregate total invoices.

Danish by Design now enters PO and invoice data into the Platform weekly and can quickly assess the percentage of total invoices that are exposed, and make plans to protect itself from potential market fluctuations. The company has found that regular monitoring of exposures means it can take advantage of positive market movements as they occur.



The Result:

Clarity, certainty and stability

Danish by Design can now easily monitor every invoice. This allows it to analyse its position and ensure it has the right strategy in place for constantly shifting market conditions.

“We get a clear visual of our exposures and upcoming payments looking six months out,” Nigel explains. “It’s easy to gain different views of this data now that we can instantly sort by date or PO number.

“The platform is a very convenient way to map your funding, and the level of analysis we can conduct helps us make informed decisions that protect our margins. Without this clarity we would not have this level of certainty and stability over our cash flow. We are in a better position to capitalise on market opportunities, and trade profitably by staying on top of costs.”

Danish by Design understands that the markets are volatile, and it’s important to stay abreast of the ebbs and flows. The platform plays a key role in its systemised approach to cash management, which involves regular reviews and adjustments.

Looking to the future, Danish by Design is exploring new Risk Management tools such as Option Contracts, and leveraging access to market insights.

We are in a better position to capitalise on market opportunities, and trade profitably by staying on top of costs.
- Nigel Rose, Managing Director, Danish by Design

The Last
Exchange
Looking to the future, Danish by Design is exploring new Risk Management tools such as Option Contracts, and leveraging access to market insights.
International Payments  Cash Management 

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