Supplier Enablement For Trade Financing: Initial Steps

scrabble-to-do-3299 copy

When it comes to trade financing (receivables financing and payables financing), there are numerous elements involved in onboarding and enabling suppliers. These efforts go beyond what we might typically consider for standard procurement and A/P-centric on-boarding processes. As we noted in the last installment in this series here, onboarding often begins with the implementation of a plan “to tier the supply based into logical tranches for targeting – by size, willingness to take a discount, APR rate, risk, geography, industry, diversity status, etc.”

After this, an initial effort usually entails:

  • The initial outreach to suppliers to make them aware of new early payment and financing options. This can include both email and phone campaigns. Best practices also suggest informing those that work with suppliers (either in procurement or not) about the outbound efforts as well. We have heard of suppliers thinking that onboarding exercises were actual schemes to extract information about their organization because of how they were contacted initially.
  • Educating suppliers about enrolment and the benefits of program participation. An education process should not assume a supplier is familiar with either the provider enabling the program (and their technology platform) or even how the specific trade financing program works in practice. Companies and their partners should take education of suppliers very seriously as a central component of onboarding to drive overall program success.
  • Gathering standard onboarding fields necessary (based on the program) to ensure the supplier is ultimately paid within the agreed upon terms, which might require more information than a standard accounts payable on-boarding process! Spend Matters PRO members can feel free to contact Spend Matters for a list of common fields for procurement, A/P and trade financing centric onboarding efforts.
  • Regulatory compliance that includes collecting the right information to be in compliance with KYC and 
other regulatory requirements. This may vary by geography and trade financing program type.

This post was based in part on content in the Spend Matters Perspective, Supplier Enablement for Invoice Discounting and Supply Chain Finance: Background, Tips, and Secrets for Success. In this research brief, Jason Busch and David Gustin explore the history and future of supplier enablement, centering not only on P2P processes, but also onboarding for trade financing (e.g., supply chain finance, invoice discounting, etc.) initiatives.

Discuss this:

Your email address will not be published. Required fields are marked *