P2P and Working Capital Content

Why Payment Companies are Missing an Opportunity with Early Pay (Part 2)

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David Gustin is the chief strategy officer for The Interface Financial Group responsible for digital supply chain finance and is a contributing author to Trade Financing Matters.

As we pointed out in our last post, payment companies are looking to convert paper checks to cards, and this is drawing interest from many firms, from private equity investing into payment companies to acquisitions (e.g., Fleetcor acquiring Nvoicepay, Visa buying Earthport). The key weapon of payment companies is to leverage interchange fees to entice their clients (buyers) through rebates and extended terms to provide an early pay option for suppliers, typically with a discount from the invoice of 2% to 3%. Yet there are several reasons why a “card only” strategy from payment companies is suboptimal.

Exploring ‘Total Cost’ as a Productivity KPI for the P2P Process [Plus+]

Total cost of ownership of the procure-to-pay process is not simply about measuring the costs associated with acquiring a P2P platform, it’s about tracking all P2P processes and managing them as a business key performance indicator. Managed well, the TCO P2P KPI can positively impact the bottom line of any business. Many organizations think that when acquiring a P2P platform, a firm business case needs to be constructed based on the total cost of the platform and high-level benefits that are reasonably achievable. But there’s actually a more effective way to think about the cost and returns of P2P technology. In this Spend Matters Plus brief, we explore this new way of measuring P2P returns and cost through a modified TCO approach.

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.

Year-end ‘Dash for Cash’ — 7 Steps to Free Up Funds Without Resorting to Tricks

It’s the end of the year, time for New Year’s Resolutions, a little vacation time and Christmas Party hijinks. But the Hackett Group, a business consultant and digital transformation specialist, is cautioning against year-end fiscal shenanigans, where money is shuffled around to make it appear that the company has hit the finish line in full stride. A new paper from the group lamenting the yearly “dash for cash” argues that you can look for sustainable, healthy ways of freeing up cash at the end of the year without pulling any three-card-monty tricks. According to the paper on working capital, many companies think it’s too late at the end of a quarter or year to free up significant cash. But it suggests 7 steps you can still use.

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.

Amazon Business Prime Updated: Analysis and Procurement Recommendations (October 2018 Update) [PRO]

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Earlier today, Amazon announced a host of enhancements to its Amazon Business Prime offering. To help procurement organizations understand the implications of these added capabilities, this Spend Matters PRO research brief provides an overview and analysis of the new solution components and offers recommendations to procurement organizations already using or considering Amazon Business.

The emphasis of this PRO analysis centers on the spend visibility/analytics, e-procurement (guided buying) and working capital/payment capabilities of the October 2018 Amazon Business release. While some of these areas are likely to be less interesting for organizations that already use a third-party e-procurement solution that integrates with Amazon Business (either via punch-out or API), Amazon’s enhanced invoicing, working capital and payment components can be applied to all potential users.

But perhaps most important, these enhancement offer some signals of how Amazon may continue to build out the capabilities of its Prime business solution. Let’s delve in.

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Working Capital Optimization: 3 Things to Avoid

In my last blog I outlined why you needed to reconsider your approach to working capital and why current programs are limited in their capabilities. In this blog I wanted to outline the things you need to avoid, or at the very least be aware of when approaching a working capital program.

Will 2017 Be the Most Disruptive Year in P2P Ever? NEW Webinar Announcement

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Disruptive technology is a very real situation for procurement organizations everywhere. Spend Matters analysis suggests that procure-to-pay (P2P) technologies will evolve faster in 2017 than ever before. Join Jason Busch and Xavier Olivera of Spend Matters Mexico-Latin America on Wednesday, January 25 at 10:30 a.m. Central for 2017: The Most Disruptive Year in P2P Ever? They'll discuss P2P technology as it relates to:

  • AI/machine learning
  • Embedded analytics and decision guidance
  • Blockchain
  • Internet of Things
  • And more...

Why Factoring Must Evolve

coal

My view of offline factoring models is that they're the equivalent of burning coal with turn of the early 20th century technology for power or heat when we could be splitting atoms or using wind or solar power instead. Like using coal for energy, factoring is wasteful, inefficient and generates unintended side effects. But what’s the solution, you ask? Easy.

What Separates Best-in-Class P2P from the Rest?

P2P

P2P (procure-t0-pay, not peer-to-peer) carries a number of solutions to your procurement function, no matter what market or industry you operate in. With so many options to choose from, how is one to tell the superior solutions from the rest? Xavier Olivera, editor, Spend Matters Mexico and Latin America, presents this complimentary research brief to explain it all: What Differentiates a "Best-in-Class" P2P Solution from the Rest?

Working Capital Management in a Low-Growth Environment

Spend Matters welcomes this guest post from Bill Stotzer, managing director, and Helen Van Ness, of Alvarez & Marsal.

In any size company and in any economic environment, strong management of working capital should take center stage. Why? In our opinion, it is one of the best ways to quickly improve and sustain the financial strength of your company. So if working capital is so powerful, why doesn’t it demand more focus and expertise? Simply stated, managing working capital has become a highly distributed set of competing responsibilities within the typical corporate structure, each driving to their independent objectives. We have several observations after working with our clients to implement solutions for many of these challenges.