The Finance Category

Has Off-Platform Lending’s Time Finally Arrived?

Now, digital B2B lenders can use fast data to scour thousands of individual data points — to instantly create a dynamic credit limit for companies that work on a particular supplier portal but only have a small percentage of receivables running through it. By having an off-platform model, this company can fund as many invoices as they want until they reach their credit limit. Virtually every supplier can be funded — only those in bankruptcy or on government watch lists are ineligible. This new form of B2B lending marries two core competencies.

For 2019, Fintech Faces More Automation, a Rise in Early Payments and a Marriage with Regtech

Spend Matters welcomes this guest post from Chen Amit, CEO and co-founder of Tipalti.

Automation will be a key driver for companies in 2019, especially in a space like fintech. Robotic process automation (RPA) became popular in 2018 and will only continue to rise in the ranks as companies are seeing the lasting benefits for a range of applications, including data management, accounting and payroll management.

Another strong trend is early payments. And also in 2019, fintech will no longer be fintech anymore. Regtech, the concept of using technology to address increasing regulatory requirements and business risks, is marrying with fintech.

Why 2019 is the Year for Companies to Address Working Capital Challenges to Avoid 2020 Crisis

Spend Matters welcomes this guest post from PJ Bain, CEO of PrimeRevenue.

“Hello transformation. Meet reality.” Those four words sum up where the global business climate has taken us in 2018, and where it will lead in 2019. Whether in the context of industry or geopolitical transformation, the economic implications of transformative change have exposed vulnerability. How can companies fund transformation in an economic climate that’s equal parts encouraging and concerning?

Ad Hoc Working Capital and the Diversification of Liquidity

Toyota supply chain

When it comes to working capital and liquidity today, there are more options than just black. Almost all companies have some form of permanent capital to fund their business operations. Even the smallest companies typically have an overdraft facility or business line of credit with their bank. Larger companies are serviced by an array of conventional (banks, factors, ABL) and non-conventional (asset managers, insurers, specialty finance) financial firms. Until recently, however, the idea of ad hoc working capital to supplement more permanent forms was not a reality, since the combination of technologies such as e-invoicing, dynamic discounting, API integration and supplier portals were being developed along with third-party sources of capital. But through rapid B2B digitization and more widespread deployment of purchase-to-pay and supply chain collaboration platforms, companies now interact with their buyer-supplier ecosystems in new ways that enable and simplify ad hoc working capital.

T&E Benchmarks: How Does Your Company’s Technology Compare on Handling Travel & Expense Reporting?

Oversight Systems

Companies in the U.S. spend hundreds of billions of dollars annually on travel and entertainment — and a study from Certify Inc., an expense report software company, surveyed executives and finance leaders to get a snapshot of how many still use manual methods versus how many have upgraded their T&E management technology. In the study, officials note that travel and entertainment costs can be a significant part of companies’ budgets, which means efficiently managing employees’ expense reports can greatly affect a company’s profits. Since 2013, the “Expense Management Trends Report: Annual T&E Outlook and Benchmarks” by Certify has worked to help companies of various sizes recognize best practices to consider in travel and entertainment reporting and as methods to benchmark such companies’ current processes against their peers.

How the Contagion Effect Could Blow Up Network Finance

In the real world, you plan for an event and it works out for a while. Then things fall apart. So you react and plan more — hoping to stop the problem from creating a contagion effect.

And here you are, thinking that you built this nice network finance model to finance your suppliers not just on approved invoices, but invoices that have been issued, or even more upstream, purchase orders that have been issued. And things have been working smoothly for a couple of quarters, or maybe for even a year or two.

But then it happens. More things fall apart.

Basware vs. Tradeshift: Accounts Payable, Invoicing and Supplier Network Head-to-Head Comparison

On the surface, Basware and Tradeshift appear to deliver similar invoice-to-pay technology capabilities as two of the top-ranked SolutionMap analyst picks for this area. (Note: We include e-invoicing, accounts payable automation, supplier network and related capabilities as components of invoice-to-pay.) After all, both beat the average functional benchmark score in the Spend Matters Q4 2018 Invoice-to-Pay SolutionMap, which publishes Dec. 4, by a material percentage.

But when you unpack how Basware and Tradeshift compare in the two “best” and core areas in which they compete, comparative strengths and weaknesses begin to emerge. Such nuances could prove all the more important when analyzing how customers and potential customers should think about each provider given the potential for them to join forces as a single, merged entity.

Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset, along with the commentary of the Spend Matters analyst team. These “Head-to-Head” columns share the insights of each quarterly SolutionMap report for SolutionMap Insider Subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Basware and Tradeshift against each other in the invoice-to-pay evaluation ring.

Not yet an Insider member? Here’s a preview: In certain invoice-to-pay categories — which include supplier network, configurability, technology (overall), general services, invoicing, payment/financing and overall invoice-to-pay scoring — Basware gets the nod. But in many others, Tradeshift takes the prize. Overall, the results suggest that the right solution will vary based on different organizational requirements. There’s no debate that invoice-to-pay selection processes will reward procurement organizations that tailor provider selection to their specific needs.

The Blurring of Supply Chain Finance Definitions

I often get this question about how factoring and supply chain finance differ from traditional invoice finance. And the real answer is its very murky. There is certainly a blurring between invoice finance, invoice discounting, factoring, supply chain finance and asset-based lending.

By whatever name you want to call it, what really matters is what usury laws are governed by the lending technique and how bankruptcy court will interpret the structure (loan, asset purchase) and what the state or legal jurisdiction laws are in relation to the technique. Definitions are fine to help educate and illustrate, but they are meaningless when it comes to judges and investors.

Lost Sourcing Savings: Survey Data Suggest a Crisis (Part 1) [Plus+]

Editor's note: This Spend Matters Plus brief is a refresh of our 2013 series on sourcing strategies, which originally ran on Spend Matters PRO.

During an ISM webinar highlighting how (and why) procurement organizations fail to implement sourcing savings, Spend Matters asked the audience (approximately 500 practitioners) a number of poll questions: Does your organization have a formal program to ensure that identified savings through sourcing and supplier management programs become implemented savings numbers? What percentage identified savings do you estimate that your organization successfully implements from sourcing and supplier management events and programs? This suggests a few key takeaways about sourcing generally.

Tradeshift: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses [PRO]

Besides the likes of “mega” players like Amazon Business, is there a market for marketplaces? When Tradeshift embarked on its journey to create a platform between organizations in 2010, it had to believe such a need would eventually become mainstream, otherwise its vision and reality would fail to intersect. Fortunately for those that backed Tradeshift’s initial hypothesis, less than a decade since launching, more companies — not just early adopters — are becoming aware of what a platform concept can deliver beyond business applications.

This Spend Matters PRO Vendor Snapshot explores Tradeshift’s strengths and weaknesses, providing facts and expert analysis to help procurement and finance organizations decide whether they should consider the provider from both an applications and marketplace/platform perspective. Part 1 of our analysis provided a company and detailed solution overview centered on Tradeshift’s business applications, as well as a recommend fit list of criteria for firms considering the provider. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

How to Inspire a Cash Flow Revolution: Insights from Taulia’s Working Capital Summit

Investors, CEOs and suppliers are pushing procurement and finance organizations to improve working capital performance, and this renewed interest in the state of the balance sheet is poised to create a revolution in how businesses approach cash flow, according to Taulia, a provider of financial supply chain solutions. There is $14 trillion in annual spend volume trapped in global supply chains, and for every $1 billion in revenue, working capital programs can create improvements totaling as much as $70 million, Taulia said last week at its 2018 Working Capital Summit in Chicago.

4 Traps when applying Artificial Intelligence to B2B Lending

The crowdsourcing concept called the “wisdom of the crowd” is where a thousand non-experts will make better decisions than the most sophisticated experts in any field. Yet humans are subject to biases in their decision-making. These biases can bleed into the artificial intelligence algorithms we design to try to make us more efficient and effective. Read about the four that we should recognize.