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Overcoming the Absurdity: Aligning Payment Term Extension with Trade Financing

early pay

There has never been a more absurd situation than exists now between procurement and supply chain practitioners and finance team members. On the one hand, there are countless programs attempting to unify and extend payment terms to suppliers, to the greatest degree possible. Such activity can have a negative procurement interest on supplier relationships while increasing supply risk, especially with lower tier suppliers, where visibility into financial health and stability is often lacking but where the trickle down effect from payment term extension ultimately comes home most to roost. Yet on the other hand, we have access to a truly amazing array of new technologies that accelerate and provide visibility into approvals and trade documentation, combined with what appears to be a near limitless supply of third-party capital, which is willing to invest in and fund both receivables and payables financing programs. Collectively, the combination should drive down the cost of capital for early payment programs, accelerating the flow of cash in the supply chain.

Nipendo’s Early Pay Solution Opens New Opportunities

Trade Financing Matters - Free White Paper Download
The Nipendo model represents a next-gen procure-to-pay platform, and is in line with the new trend of companies developing early pay solutions in order to create liquidity to their supply base. Find out more about Nipendo's spend coverage, validation solution and the innovative discounting solutions that can capture the long tail of procurement with this new, downloadable paper from Trade Financing Matters.