New Money Market Regulations impact on Trade Receivables

- July 22, 2014 3:07 AM | Categories: ,

As a corporate treasury or institutional investor, you should be smart enough to know that your money market fund’s net asset value does not always equal a buck. That’s accounting heresy. This Wednesday, July 23, 2014, the Securities and Exchange Commission (SEC) will issue new rules for further regulation of money market mutual funds. The goal is to reduce the risk of investor runs on money market mutual funds similar to what occurred in the 2008 financial crisis. There are four options under consideration: Require prime institutional funds to shift from a stable, $1 per share net asset value to […]

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Digital transformation of financial services

- July 21, 2014 2:08 AM | Categories:

Picture2 We are seeing the movement of data and documents to a networked world. I remember reading Nicholas Negroponte, the author of the 1995 best seller, Being Digital, who touted the bits and bytes innovations as the fax and the CD-ROM were heading the way of the Beta Max and dodo bird. Heck I still remember when the lockbox business was considered sunset in the 80s and receiving mail, wait we still get mail?). Okay, back to the topic, what exactly does digital transformation mean? What should senior management focus on and why? This is almost always painful because many in […]

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Accounting issues with Dynamic Discounting programs

- July 21, 2014 1:15 AM | Categories:

With the explosion of early payment solutions to assist a buyer’s supplier group (egs. dynamic discounting, reverse factoring) and the start of receivable auction markets, the issue of rebates and retiring payables early has become serious. For reverse factoring programs, the trade payable vs. bank debt issue has no clear guidance from the IFRS in regards to reclassification of trade payables to bank debt. I’ve touched on this in a prior post – see Supply Chain Finance Payable Reclassification issue – dead or alive? For dynamic discounting programs, the focus of this blog, most of these programs are generally small […]

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Payplant offers cash starved App Developers an early pay solution

- July 17, 2014 3:12 AM | Categories: ,

Payplant got their start when a few tech entrepreneurs (Ronjon Nag, Neerav Berry) sold their app development business to Blackberry. In the course of their software development days, Payplant noticed how difficult it was for app developers to stay in business, since the majority of their expenses are expensive contract labor (programmers) who can quickly walk off the job if not paid on time. The founders saw a need to accelerate payment for these vendors and now have been operating for over a year (yes, filling an unmet need). Like any of these new ventures, you have to ask a […]

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Three core Supply Chain Finance solutions from Demica

- July 16, 2014 2:03 AM | Categories: ,

index 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 space? 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. So they have held the standalone company for 12 years. But just what does Demica do? Demica’s three core […]

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When JPMorgan (or Citibank) and Oxygen Finance (or Taulia…) knock on the same corporate door

- July 15, 2014 2:17 AM | Categories:

Given the explosion of new alternative lending models, corporates are now being pitched by not only their bank(s) but software vendors who increasingly are coming with technologies and money to help with early payment solutions. I have spoken to a few banks that have been beaten to the punch bowl by vendors anxious to tell their story (and of course grow). Because vendors get there first, banks increasingly have to find ways to work with these vendors (or not). I have written about some of the more innovative small business platforms that present a real threat to banks small business […]

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B2B Payments stuck in the Middle Ages

- July 14, 2014 2:11 AM | Categories:

Personal-cheque Vast majority of payments are made by cheque   I continually receive mailed cheques to Canada (yes cheques, not checks) from my business relationships from across the border. It never ceases to amaze me how many U.S. businesses (including bank clients) still deal in the world of cheques. In the U.S., cheques continue to be the dominant business-to-business payment method. While Europe has made great strides with contactless card payment methods and chip and pin cards; the U.S. still relies on paper checks. The Association of Finance Professionals recently surveyed its members around electronic payments and released some key findings […]

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Mixing Apples and Oranges: 8 Differences Between Dynamic Discounting and Supply Chain Finance Programs

- July 10, 2014 11:37 AM | Categories: , ,

Trade Financing Matters - Free White Paper Download
Discover what separates innovative discounting and supply chain programs with these 8 easy-to-digest differences. While these 8 differences aren't the be all, end all, they will give vendors and consultants a better idea of where discounting and supply chain programs stand and how they can benefit each other in a corporate setting.

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Vertical focus – Transportation sector bursts with SCF opportunities

- July 9, 2014 2:02 AM | Categories:

t The transportation industry has always been considered very messy when it comes to AP processing. There are numerous vendors providing freight audit and payment processing services, but only recently have some of these vendors looked to add early payment capabilities. It’s not surprising; the sector has attractive characteristics: It’s a big sector According to the annual State of Logistics report published by the Councile of Supply Chain Management, the U.S. logistics market is estimated at $1.39 trillion for 2013, up $31 billion from 2012.   The report states that the three main category of costs are inventory carrying costs, including the […]

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BNP Paribas fine a wakeup call to Vendors, Supplier Networks offering finance

- July 8, 2014 1:54 AM | Categories: ,

The recent $8.9 billion dollar fine assessed on BNP for funneling money into Sudan, Iran, etc. for many years has implications for supplier networks, einvoicing providers, B2B exchanges and the non banks interested in funding. Why? As more supplier networks become involved in providing third party financing, cash control may now move out of the domain of a buyer – supplier relationship to other third parties involved. First, why was BNP Paribas fined so high? According to the Wall Street Journal, BNP Paribas provided more than $190 billion of dollar clearing services for Sudanese, Iranian and Cuban parties. The U.S. […]

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Export Import Bank – Corporate Welfare or Export Champion?

- July 7, 2014 1:48 AM | Categories: ,

US-ExportImportBank-Seal2 The question of whether the US government is likely to withdraw support from the Export-Import Bank of the United States (Ex-Im Bank) is pushing the hot buttons of many large corporates and is getting prime press in the WSJ.  Ex-Im Bank was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress. Congress sets the bank’s lending cap and must reauthorize its charter, which expires Sept. 30th. First, what does Exim Bank do? The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to […]

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Sellers blossom on Amazon’s Marketplace, but face Working capital challenges

- July 2, 2014 2:14 AM | Categories:

My colleague Jason Busch has talked about how Amazon will eventually own the small and medium sized business (“SMB”) market for eProcurement. But what about the other side of the equation, from the sellers perspective? Amazon is helping small businesses and the numbers bear this out. Amazon’s total revenues were $74.5 billion last year. This number includes both their own product sales where Amazon is the seller of record and service sales that represent third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities such as AWS. Amazon does not disclose the breakdown, but […]

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