<div id="readability-page-1"><div>Kerri Thurston, Chief Financial Officer at C2FO, oversees all global finance functions and strategic initiatives. 
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In times of crisis and economic uncertainty, you may believe the safest course of action for your business is to hold as much cash as you can for as long as you can. Many companies took this approach during the early days of the Covid-19 pandemic, in some cases extending their terms on payables to 60, 90 or even 120 days as they focused on buffering cash reserves. While this approach is an effective way to preserve cash, it can also be short-sighted and potentially damaging to your supply chain.  
At a time when corporations are more concerned than ever about their impact on climate change, diversity and inclusion, and other pressing social issues, it’s important to keep in mind that taking steps to help sustain suppliers can have positive long-term social and economic consequences.  
 
Your suppliers provide jobs and create economic opportunities in the communities where they operate. The success of those suppliers correlates directly with the success of those cities and regions. Likewise, creating ways for your vendors to thrive also benefits your organization via a sustainable supply chain and improved trust with your valuable suppliers. One recent example is Empower@Work, a collaborative program backed by companies like Gap Inc. and Walmart that aims to enhance gender equity and the roles of women in the global supply chain.  
 
Niall FitzGerald, the former chief executive of Unilever, may have put it best when he called corporate social responsibility “a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it … because it is good for our business.” With that in mind, here are some ways you can exercise corporate social responsibility with your suppliers: 
 
Close Collaboration  
Developing and maintaining strong relationships with suppliers is imperative to keeping your business running smoothly. That’s particularly true in times of economic uncertainty when some of your suppliers might not have the cash on hand they need.  
Staying in contact with your suppliers, paying them in a timely manner and understanding their business all contribute to maintaining that trust. These actions let them know you are invested in their success as well as your own. Likewise, communicating clearly with your suppliers about changes to your business or new initiatives being undertaken is also key to building a transparent relationship. 
Working closely with your suppliers during challenging times will pay dividends down the road. They’ll remember how your company was there for them when times were tough, and they may someday return the favor.  
It’s something Japanese companies have understood for generations. Their keiretsu system of manufacturers, supplies and distributors all working closely together has been imitated by other cultures since the 1980s, but has been hard to duplicate. It’s a model worth studying as your company builds more powerful relationships with your vendors and trading partners.  
Access To Liquidity  
As you know, good suppliers are hard to find — and even harder to replace. Right now, many of those trusted suppliers may be in need of more liquidity. The loan programs by governments and central banks are well intended, but many have proven to be too little, too late.  
Even if your own cash position has taken some hits from the pandemic, there are still ways for you to help your suppliers with their liquidity. Some early payment programs enable you to use a third-party funder instead of funding early payments from your company’s balance sheet. In a recent Working Capital Survey that our company conducted with over 6,700 small to midsized companies worldwide, we found that 66% of respondents said they would be interested in participating in an early payment program developed by their customers enabling them to set the discount rates on their receivables. 
The ability to provide your suppliers with much-needed cash not only helps them in a time of crisis, but it can also improve the level of trust and reliability with those suppliers for years to come.  
Creating A Community  
The idea of building a community around your supply chain may sound daunting, but it doesn’t have to be. Perhaps you’ve already started the process. As you can guess, it’s about more than just setting up a supplier portal with directives on how to work with your business. It’s about understanding and connecting with your suppliers. 
One way is through supplier segmentation. At a time when at least 400,000 U.S. small businesses (many of them minority- and women-owned businesses) have closed in the past year due to the pandemic, focus has shifted toward helping smaller companies get the capital they need to keep running. By segmenting suppliers by size or ownership, you can ensure they’re getting the support they need from your company. Forming online communities for these suppliers can also help them in terms of sharing resources, ideas and best practices with each other. 
In Conclusion  
If the past year has taught us anything, it’s the fact that we are “all in this together.” No individual or organization can survive alone.  
That means it’s an ideal time to connect with your supply chain. Well-funded businesses create jobs that drive economic gains. By taking a few steps to enhance relationships with the suppliers and other trade partners in your company’s ecosystem, you not only help them, but you contribute to the health of the world’s economies as well. 
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With corporations more concerned than ever about their impact on climate change and social issues, it’s important to keep in mind that taking steps to help sustain suppliers can have positive long-term social and economic consequences.

Council Post: How Corporate Social Responsibility Starts With Helping Your Suppliers