Electronic Data Interchange (EDI) remains the lifeblood of corporate supply chain data flows today. Indirect business networks and e-invoicing networks, such as the kind proffered by Ariba, Basware, Tungsten and others, are tiny by comparison in terms of documents and dollars changing hands. Yet EDI isn’t perfect. Advanced ship notifications (ASNs) is one area where EDI still comes up short, especially as a system of record and trigger for trade finance.
In his recent white paper, “On-Demand, Event Triggered Finance With Network Models – A Game Changer?,” my colleague David Gustin provides a number of reasons why the ASN has not become a reliable trigger for financing, especially compared with approved invoices.
These reasons include:
- Corrupt data: Vendors generate ASNs in various ways (scan pack solutions, B2B website, logistics website, manual keying) and rush them to ship. ASNs are generated before goods are packed and have the potential to differ from the actual goods shipped
- Incomplete data: If multiple carriers and modes (e.g., air, ocean, truck) are used, it can be very difficult to get 100% complete information
- Data proliferation: Big box retailers with many SKUs require more and more data. Five-thousand-line ASNs are not uncommon.
Given the challenge of ASNs as a trigger for finance – and the approved invoice as a truly “last mile” equivalent mechanism to enable finance at the end of a buyer/supplier transaction – what other mechanisms do we have?
Download David’s full analysis to explore different event triggers as a means to drive financing in the supply chain here. We also encourage you to investigate our deep, subscription coverage of trade financing, invoicing discount and P2P on Spend Matters PRO.
In addition to Spend Matters PRO research, David and Jason offer workshops, lectures and advisory services to corporations, banks, private funds, consultancies and technology providers that want to learn more about the trade financing ecosystem and its intersections with new technology products and platforms. Contact them directly to learn more: jbusch (at) spendmatters (dot) com or dgustin (at) tradefinancingmatters (dot) com.