Cost of Christmas Leaves Suppliers Waiting for $110 Billion

LONDON, Dec. 19, 2018 /PRNewswire/ -- The cost of manufacturing, shipping and selling the millions of gifts to be given this festive season will leave thousands of companies waiting for payment of invoices worth a staggering $110 billion, an increase of 18% year on year, according to the latest analysis of global accounts receivable by Greensill, the leading non-bank provider of working capital finance.

Greensill teamed up with leading economics think tank the Centre for Economics and Business Research (Cebr), to analyse the accounts receivable of the top manufacturers of Christmas gifts, as well as the largest companies in their supply chains around the world.

The results show a vast global network of payments between the manufacturers of hi-tech components for everything from smart phones and tablets to the latest must-have toys, video games and clothes.

The 18% increase in accounts receivable outstanding in this year's holiday supply chain indicates that more suppliers are being paid later than ever before, which is a major concern for businesses everywhere.

"We analyse the Christmas holiday supply chain in this way as it gives us a really good look under the hood of the global economy, revealing the finely tuned engine that every business on earth relies upon to run efficiently," says CEO Lex Greensill.

"Greensill uses technology to level the playing field for all businesses in the supply chain, to give them access to cash at rates that until now have been available only to giant corporates. Greensill calls this process the democratisation of capital – making affordable cash easily available to all businesses." 

In forecasting the 2018 festive season accounts receivable outstanding, Greensill and Cebr found that consumer electronics will once again be the gift category generating the most invoices in the supply chain, with a massive $39.7 billion of accounts receivable forecast for the 2018 Christmas season — up 16.9% on the same period in 2017. 

The biggest increase, however, is seen in clothing, where accounts receivable outstanding are expected to show growth of 19% in the past year to a forecast $22.8 billion. Accounts receivable outstanding associated with toys are forecast at $2.4 billion this holiday season, an expected increase of 16%. 

"Greensill's working capital solutions, including supply chain finance, help companies to unlock all that capital and put it to work," Mr Greensill added. "Many companies pay their bills in 90 to 180 days. Imagine if that $110 billion was made available right now, with a tap of your phone. Imagine the difference those suppliers could make. That's what we do for our clients at Greensill."

For more, download Greensill's full whitepaper on the 2018 holiday supply chain. 

Notes to editors: 
Greensill is a specialist provider of working capital finance for companies globally. Founded in 2011 by Lex Greensill, the company provides businesses with alternative sources of funding, allowing them to provide suppliers with the opportunity for faster payment while at the same time preserving their own capital position. The company is headquartered in London with offices in New York, Chicago, Frankfurt, Singapore, Johannesburg, Sao Paulo and Sydney. 
Greensill has provided $50 billion of financing to a pool of 1.7 million suppliers in more than 60 countries. In 2018, growth equity investor General Atlantic became a partner, valuing Greensill at $1.64 billion.

Methodology Note 
This Greensill/Cebr research was conducted by analysing the three key sectors which account for the majority (59%) of spending on Christmas gifts - clothing, consumer electronics and toys. To estimate the value of accounts receivable throughout the supply chain, Cebr and Greensill  examined the annual reports of major companies from each sector at various stages of the supply chain. Data on each company's accounts receivable provided information on the amount owed to the company downstream in the supply chain, while the accounts payable provided information on the amount that the company owes to its suppliers upstream in the supply chain. We then scaled up the accounts receivable to arrive at sector-wide estimates using data on the companies' market shares and in turn the values for global accounts receivable outstanding.

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SOURCE Greensill