Supplier Enablement For Trade Financing: Starting to Transact

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Supplier enablement for trade financing is not just a question of initial onboarding efforts and data collection (for a primer on what these steps entail, see our previous coverage of the topic here, here, here, here and here). It also requires thinking through all the elements of how one will gather the necessary information on a transactional level to provide visibility and triggers for early payment. A range of e-invoicing and supplier/business network technologies can enable these steps. They include:

  • Enabling a means to gather supplier invoice data as quickly as possible (and possibly other 
trade-related documents) and match these against internal documents such as a PO, service entry sheet, etc. Matching processes and related efforts can either happen in a closed systems environment (with information on status then relayed to third party solutions or organizations involved in the financing component) or it can happen in a supplier network through pre-validations and systems integration – or a combination of both.
  • Automating transactional data flow in as systematized way as possible – to prevent unnecessary latency (which shortens the financing window for each transaction) and to ensure data integrity and quality
. Straight-through processing is one of the best enablers of long financing windows in any trade financing program – a key to unlocking cash flow for suppliers and making programs more interesting to finance from either a treasury or third-party capital perspective.
  • Maintaining supplier master data accuracy/integrity over the period of enrolment in the supply chain finance or invoice-discounting program – outside of transactional details alone. We should not assume data would remain constant including supplier contact, address, insurance, credit, banking and other information. While banks may focus on KYC-related efforts as part of their onboarding processes for offering credit to suppliers through various means, we cannot assume such a one-time or periodic effort is sufficient for trade financing programs. In fact, following regulatory requirements alone is a recipe for not considering all of the additional business-centric considerations that can drive specific outcomes (e.g., modifying an APR offer based on a change in underlying vendor file information).

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.

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