A win-win situation for you and your suppliers.
Supply Chain Finance is an attractive method for improving your working capital by providing suppliers with access to advantageous financing by leveraging the buyer’s stronger credit rating.
- Extend supplier payment terms without compromising price
- Improve overall balance sheet, including off-balance sheet finance
- Reap early settlement discounts while still paying invoices at maturity
- Improve process capability in Invoice Receipting, Approving, Electronic Invoicing, and overall Procurement
- Reduction of Trade Receivables and increase in cash position
- Faster access to cash at advantageous rates
- Stronger relationships with buying companies that result in a competitive advantage
- Expedited conversion cycle from delivery to cash
There are two ways to achieve Supply Chain Finance
Using your own cash to pay suppliers early, Dynamic Discounting through a discount based on a sliding scale, so that the timing of when a supplier requests to be paid directly correlates to the amount of discount against the invoice.
The second option is true Supply Chain Finance where the (typically) larger buying company has a relationship with a third-party Financial Institution (FI), guaranteeing payment to the FI whilst enabling the supplier to benefit from the larger company’s better credit rating, and therefore typically cheaper access to liquidity.