Nipendo, the new kid on the block offering finance David Gustin - March 4, 2014 7:46 AM | Categories: Payables Finance, Technology & Platforms | Tags: Nipendo When I first heard my colleague Jason Busch talk about Nipendo and their machine to machine capabilities, I admit, I didn’t really get why this had any implications for working capital and trade credit. I mean, I get it, it can take supplier data and has an advanced e-invoicing platform. But when Nipendo began to speak to me of their validation process and their ability to take one specific field (eg. say quantity, or tax, or currency) and match that across the entire business process, I began to think this nukes the traditional 3-way matching process and does so in almost 90%+ cases in an automated way. Now the post shipment financing implications begin to look more interesting. To take a step back, Nipendo had launched a factoring product in 2010, but began to realize that the banks have a significant stranglehold over the market via their ability to provide money to their customers, and use their customers receivables as collateral. Trying to compete with banks in this manner is a very difficult proposition. Not many companies want to ask their bank to release certain receivables so they can get financed in a more efficient and lower cost manner. So what Nipendo has put in place today is really about giving the corporation choice. They have a combination dynamic discounting product where the corporate can finance their own supply chain, and they have a third party model where their funding partner will step in and provide financing. What’s unique about the way they do this is how the invoices get approved in the first place. Nipendo’s platform completely fixes the problem of dilution. When they say an invoice goes through Approve to Pay, their system runs all the validations that have been set up by their client. For example, they can validate the price is the exact price based on contract, quantity is correct based on receiving and PO, taxes are compliant with location, and FX is calculated correctly, etc. When it says an invoice is approved, it means it has been 100% validated against business rules of the Buying organization. And in over 90% of these invoices are approved within 2 minutes. Traditionally A/P would take in a bad invoice into their system and then try to figure out what to do with it. Nipendo does not allow something like this to happen. They put a firewall between their system and the invoice and only a good invoice would make it into the system. So when you, as a funding provider, have an opportunity to finance one of these invoices, you know there really are two risks – The buyer becomes insolvent and can not pay the invoice (or will not) The buyer decides not to pay the invoice because the supplier’s goods are of poor quality What Nipendo is doing is to provide a platform that removes some of the barriers that impedes finance. Nipendo makes the invoice submission and approval process transparent. No longer do you submit an invoice to A/P and it goes into a black hole. In our next post, we will discuss how Nipendo is doing that with their funding partner. Related Articles Supplier Network 2014 Forecast: Customer Recommendations and Vendor Shortlists E-Invoicing 2014 Forecast: Customer Recommendations and Vendor Shortlists Nipendo Announces First-of-a-Kind E-Invoicing Guarantees, Supply Chain Practices in Developing… Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of new posts by email.