PrimeRevenue data supports efforts on Supplierpay

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The folks at PrimeRevenue were kind enough to share some data with me recently regarding small business usage of their finance programs. PrimeRevenue supports over 15,000 suppliers globally, so they sit on a wealth of data around payment terms, impact of early pay, etc.

What makes this data so interesting is that it comes from their actual transaction throughput. It is not “survey” data which comes from online surveys filled out by anonymous souls. It represents actual invoices being paid.

What I found interesting is how this data counters the REL Hackett Fortune 500 report that DPO at global corporates averages 34 days. What PrimeRevenue’s data is saying is that U.S. based SME’s are waiting almost 4 months to get paid. Painful, right.

Here are some of the highlights from the data analysis of the 15,000 suppliers:

  • 42% of the vendors are defined as SME suppliers – (having less than $25 million in revenues as defined by U.S. International Trade Commission
  • The interesting story is the payment terms for these U.S. SMEs were on average 101 days (compare this to REL Hackett’s numbers for publically traded companies of 34 days – See Pierre and Mine
  • PrimeRevenue’s average payment acceleration is 75 days (101 to payment in 26 days)
  • 89% of all the invoices were traded – demonstrating a real need for early cash

PrimeRevenue, through their group of 50 financial partners, advances an average of $62 million to these suppliers daily.

All in all, some very impressive, real data, not just another anonymous survey being done

It will be interesting to see data by region, over time and via various industry sectors. There are real companies behind the numbers, and I for one would certainly like to get a better idea of how they view these transactional finance model versus the traditional bank finance world.

Stay tuned!

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Voices (2)

  1. David Gustin:

    Hi Jonas

    Thanks for your comments. I have to respectfully disagree. Forget PrimeRevenue. Any network, Basware, Taulia, etc. has detailed trading data on private transactions. They also have this for both private and public companies.

    Correct me if I am wrong, but REL uses public data from a company’s balance sheet. You have no access to individual private transactions unless you are doing a specific consulting assignment. And you do not have the granularity that data networks have. It’s as you say, public traded companies and relies on it’s published figure. Networks have real data too, thats invoice, purchase order, shipping, etc. data.

    I would refer you to this post

    http://spendmatters.com/tfmatters/supply-chain-finance-platforms-should-rethink-business-models/

    Cheers
    David

  2. Jonas Schofer:

    Hello David, thank you for the interesting analysis. While I do not want to argue that REL’s analysis is giving all the answers, it does at least cover all the public traded companies and relies on it’s published figures, and therefore very real data.
    The PrimeRevenue data naturally only shows those payables and those companies that are doing business with them – that means very cash conscious companies that are already using Supply Chain Finance because probably other means of terms extension are depleted, leveraging the DPO to very high levels. And also only those suppliers that accept Supply Chain Finance are in that data cut – maybe they have even traded price discounts for being a part of the program. So whereas REL’s analysis looks at ALL suppliers to ALL the major companies, PrimeRevenue’s data is a much smaller cut of the overall data base, and I would not go as far as to assume that their results are statistically representative for all American SME’s in order to allow a generalistic statement that “SME’s wait for 101 Days”.
    With kind regards,
    Jonas Schofer
    Director Hackett-REL

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