Global trade uncertainty and how it affects AP
Global trade is currently experiencing significant disruption due to four main factors. The introduction of tariffs on previously exempted goods has raised concerns, while soaring input costs driven by inflation are impacting consumer prices. Businesses are adapting by shifting their sourcing strategies to manage trade risks, but confusion remains about how to regain control of supply chains. Additionally, slower GDP growth and increased complexity in invoices from global vendors are complicating financial forecasting and adding to the uncertainty.
Global trade disruption and uncertainty.
So I think there's probably four factors that are top of mind in affecting global trade uncertainty.
So the first one is the introduction of or threat of tariffs on previously exempted goods. That's the obvious one that everyone's talking about.
I think number two is it's like when I go buy salmon from Whole Foods, it's like the price just keeps going up it seems. I think they just do it just to see how much people are willing to pay. So there's this concept of soaring input costs driven by inflation.
I feel it personally. I'm sure the supply chains out there do as well.
The third thing is, just major sourcing shifts to avoid trade risk. So if you think about your business, and it's like, oh my god. All my factories are overseas, and my supply chain's overseas. Like, how do you how do you bring some of this back under control? Where do you start? What's the strategy? So there's all these confusion confusing things as well.
And then I think in general, right, just slower GDP growth or uncertain GDP growth across global markets. So those are the four.
In terms of the impact on accounts payable, I think the obvious one is is complexity. Right? So invoices from all these global trade vendors are gonna be more complex. And I think tied to that, you know, tariff missteps, right, create huge risk in the flow of supply, so it could actually delay goods and delay the supply chain, delay finished goods sold.
And then also, there can be surprise fees embedded in the invoice transactions that create some complexity.
And then when you think about all this uncertainty, you know, from a financial supply chain perspective, cash flow forecasting is gonna be harder than ever, not easier. So, yeah, that would be my take.
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