Category Archives: Trade Financing

Investing in P2P, Trade Financing and Procurement Tech: Where the Smart Money Is

- November 17, 2014 6:24 AM | Categories: P2P, Trade Financing

file5381245784488 This year, I’ve spent what feels like about half my time working “around” the money side of this sector with a range of individuals, private firms and providers evaluating, making or exiting investments or engaged in M&A activity. To say there is significant transaction activity would be an understatement – especially comparing the number of deals that actually “get done” to those that are investigated on a cursory level or ultimately go down a busy path and never end up getting consummated.

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The White House Lets David Gustin In – Trade Financing Must Really Matter

- November 13, 2014 9:47 AM | Categories: Industry News, Trade Financing

Next week, my fearless colleague David Gustin, managing director of Trade Financing Matters, is headed to the White House to present at a SupplierPay meeting. He’ll be joined by a group of procurement and finance executives that have bought into the president’s request (not mandate) to get cash moving through the supply chain more efficiently and into the hands of smaller businesses.

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Invoice Discounting Programs and Supplier Uptake: Exploring Behaviors of 3,800 Surveyed Suppliers on the Taulia Network (Part 1)

- October 8, 2014 2:39 AM | Categories: Invoicing, P2P, Suppliers, Trade Financing

The adoption of both e-invoicing and invoice discounting programs is still very much in its infancy. Good data is difficult to find when it comes to the following types of questions: With what frequency do suppliers log on to portals designed to provide invoice approval and related information? What types of suppliers are most likely to take a discount? At Taulia’s recent customer event, Spend Matters learned the results of actual data answering these types of questions (and many more) based on the practices and survey responses of more than 3,800 suppliers. In this two-part Spend Matters PRO research brief, we share the highlights of what suppliers on the Taulia network can teach us to maximize invoice discounting and e-invoicing adoption. The findings are fascinating, surprising (in many cases) and pragmatic in helping us build more effective P2P, invoice discounting and trade financing programs.

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Best of Trade Financing Matters: David Gustin’s Picks

- August 20, 2014 10:32 AM | Categories: Supply Chain, Trade Financing

Continuing on with “Best Of” Week on Spend Matters, here are some must-read posts from our sister site, Trade Financing Matters. I asked David Gustin to pick a few that are most pertinent to Spend Matters readers or hold most sentimental value. Read on to see what these are!

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When Receivables and Payables Financing Meets Bean Counting

- August 4, 2014 10:24 AM | Categories: Commentary, Trade Financing

My Trade Financing Matters colleague David Gustin has spent quite a bit of time over the years investing the accounting treatments of various trade financing schemes (from dynamic discounting to approved trade payables financing). Yet what’s most curious about this area is that we shouldn’t accept the current state of various accounting treatments (e.g., rebates vs. non-rebates and balance sheet impact) as gospel. Regulators and the Big 5 alike are still exploring the area in more detail.

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New Downloadable Paper from Trade Financing Matters

- July 28, 2014 6:20 AM | Categories: Learning / Research, Trade Financing

"C2FO’s Marketplace Model Attracting Attention" is a new paper from David Gustin (managing editor, Trade Financing Matters). In it he outlines the strengths, weaknesses, and ultimate upside of the C2FO early payment model. Here’s an excerpt: “C2FO is an online, early payment system that hosts a daily market, where suppliers make dynamic bids for accelerated payment of their approved invoices by discounting those invoices in real-time events. C2FO has been described as a private NASDAQ for cash flow between buyers and their suppliers.”

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Taulia Raises $27 Million, Valuing Company at 15X Trailing Revenue (Roughly)

We continue to be surprised at some of the funding rounds and public company valuations in the sectors of procurement and trade financing (receivables and payables financing). However, Taulia is one of the few vendors that I’d bet my own money on to grow into what is a curiously high valuation based on historical – even historical tech – norms. It’s my estimate that the recent Taulia valuation round was done on a valuation multiple roughly around 15 times trailing top line numbers. I base this multiple on a napkin sketch of Taulia’s current accounts and business activities (including program adoption) and a WSJ blog pegging the overall valuation at $200 million.

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Download This Paper on the Differences Between Dynamic Discounting and SCF Programs

- July 23, 2014 6:42 AM | Categories: Learning / Research, Trade Financing

Available over at our sister site Trade Financing Matters is a new downloadable paper from David Gustin (managing director). “Mixing Apples and Oranges: 8 Differences Between Dynamic Discounting and Supply Chain Finance Programs” delves into supply chain finance programs and innovative discounting can benefit these programs even further.

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Demica’s Three Core Supply Chain Finance Solutions

Demica is owned by J.M. Huber, a diversified multi-billion dollar family-owned company headquartered in the U.S. with operations and staff located globally. I had to ask what a company of this size is doing owning a vendor in the supply chain finance market. After all, J.M. Huber is a diversified multi-national company dealing with engineered materials and natural resources. Huber established a financial services division in 1997 and started working with Demica in 2001. In 2002, they acquired the platform. But just what does Demica do? Their three core products are focused on supporting supply chain finance, invoice discounting, and trade receivables securitization.

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Physical and Financial Supply Chain Convergence: It’s Real But Harder Than It Looks

- July 16, 2014 10:32 AM | Categories: Innovation, Supply Chain Management, Trade Financing

My Trade Financing Matters colleague David Gustin has been talking quite a bit about the convergence of financial and physical supply chains. But there’s both hype and reality, as he points out in a post titled "The Hype of Physical and Financial Supply Chain Convergence." Still, the value of business networks that operate between companies in such scenarios is indisputable. And they’re becoming even more so as supply chains operate in a globalized context.

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For Investors, ICC’s 2014 Trade Register Report Lacks Credibility

- July 1, 2014 4:20 PM | Categories: Trade Financing

I know I won’t be popular with this post, but I never choose the popularity route. To me, I’ll take quality over quantity any day. And so I have to point out that I think the 2014 International Chamber of Commerce (ICC) Trade Register Report has a ways to go. The report concluded trade transactions for all intent and purposes have practically zero losses. That’s right -- zero losses. The problem is that the people who matter don’t believe it. Who matters? Well, investors matter. And if investors don’t find your data credible just because the banks say so, then they will buy something else.

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E-Invoicing and Trade Financing Intersections – Courtesy of Billentis

E-invoicing is just a piece of the bigger trade financing puzzle (a market that is still largely un-intermediated with debits and credits sitting on the balance sheets of those companies engaged in trade). Beyond e-invoicing, it’s critical to explore the intersections with broader purchase-to-pay (P2P), direct materials procurement, services procurement, and related systems – not to mention understanding all of the related capabilities and requirements of supplier on-boarding (e.g., know your customer – KYC) and management.

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