Paper Bills of Exchange inhibit Finance

- July 30, 2014 3:49 AM | Categories:

Uniform Commercial Code hasn’t moved to the 21st century with Bills of Exchange It’s 2014 and we have cloud solutions, online purchases, PayPal, pcards, chip and pin, online deposit capture, but Bills of Exchange still must be paper. For those of you who don’t know what a Bill of Exchange is and how important it is in commerce, the Bill of Exchange /draft has the following characteristics It is a contractual payment order both amount and date certain It is issued by the seller (as opposed to a cheque) and accepted by the buyer (via signature), in other words, signed […]

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Sizing the Reverse Factoring Market

- July 30, 2014 2:22 AM | Categories: ,

Enrico Camerinelli, Senior Analyst EMEA, Aite Group and Emmanouil Schizas, Senior Economic Analyst, ACCA (the Association of Chartered Certified Accountants) recently conducted a business case study for supply chain finance. In February 2014, ACCA’s Global Forum for SMEs noted the potential for further innovation in the sector, which currently makes up only 4% of the global receivables financing market (ACCA 2014). This report addresses a number of areas, including providing a checklist for supply chain finance programs to the costs to set up a reverse factoring program (both one time and recurring, which I think they underestimated by not including […]

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Commodity finance being done by Trading Houses

- July 29, 2014 2:30 AM | Categories:

A story recently in Reuters talked about how the biggest trading houses are filling the traditional banks (and mostly European banks role) of funding traders. This got particular attention, especially in light of the Obama administrations sanctions on Rosneft and other big Russian commodity producers. If you look at the big trading houses, do they really want to take over the role of banks (who have access to historically cheap deposits?). Or is it really a question of providing these large trading houses with huge credit lines to further provide upstream finance to their smaller counterparties?   The authors Dmitry Zhdanniko […]

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Obama’s no lose proposition with SupplierPay

- July 28, 2014 3:14 AM | Categories:

I am not going to rehash all the stuff about Obama’s big launch to help small suppliers get paid early. It was an e-invoicing vendor’s banana split on a hot summer day. Let’s just say, it can’t hurt. I mean, what does Coke, J&J, Toyota, etc. have to lose? I would bet my bottom dollar that all have some initiatives already to help small suppliers – p-card programs, PO finance for small critical suppliers, dynamic discounting, reverse factoring or supply chain finance, etc. SupplierPay builds on the federal government’s QuickPay initiative, which President Obama launched in 2011. That program mandated […]

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Venture Capital & Private Equities’ love affair with Finance Apps

- July 24, 2014 2:09 AM | Categories:

Hats off to Taulia for raising $27 million Series D round at a valuation around $200 million. See this WSJ article. Jason has been covering the valuations in the P2P market for some time (read What Really Drives Valuation For Technology Companies These Days?) It’s pretty frequent that I get calls from the private equity world trying to understand the size of various early pay techniques. Not surprising, many of the apps being developed are finance oriented. What we have going on now is sort of a gold rush to find the next big company for early payments. While there is a perfect […]

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C2FO’s Marketplace Model Attracting Attention

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New Money Market Regulations impact on Trade Receivables

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

Update, 23 July-The SEC voted 3-2 to abandon the fixed $1 share price and float in value like other mutual funds. The rules also allow money funds to temporarily block investors from withdrawing their money in times of stress, or allow the funds to impose a fee to redeem shares. Companies would have up to two years to comply with the changes. 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 […]

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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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