Category Archives: Supply Chain Finance

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Early Pay Finance Ain’t Easy: Understanding Customer Deductions

Every industry is affected by customer deductions. Called a variety of names by companies — including deductions, chargebacks or short-pays — from the perspective of a digital lender focused on invoice finance, understanding the nature of deductions is a first start to building smart underwriting and dynamic lending capabilities. Why? Deductions mean a diluted invoice value.

Intelligent Trade Finance: The Confluence of Blockchain and the Internet of Things

Spend Matters welcomes this guest post from Biji John, product manager, trade finance, at Finastra.

The fundamentals of trade and trade finance have not changed in centuries: it’s process heavy, with bottlenecks and disputes everywhere. Characterized by paper and manual operations, the back office is ripe for next-generation transformation. In the middle and front office there is potential for far greater automation and use of real-time data, for example in the accounts receivables process, in SME credit underwriting, loan booking, and monitoring and indeed for relationship managers (human and virtual) to surface and analyze data to gain insights and provide more data-driven recommendations to corporate clients along the financial supply chain.

Fintech or House Bank for Early Payment Solutions: Key Differences

There are three buyer-centric solutions to facilitate early payment for suppliers: supply chain finance, dynamic discounting and commercial cards (p-cards, v-cards). Bank-developed solutions in this space rely heavily on companies using credit lines. The focal point tends to be on p-card solutions, not dynamic discounting. Why? P-cards generate much more in fee revenue than dynamic discounting, particularly if a client uses its own funds to facilitate early payment instead of a bank credit line. 

Why Platforms and Source-to-Pay Networks Need Finance

More and more procurement software platforms and source-to-pay networks are receiving RFPs from clients requesting way to help improve working capital. Companies, even middle-market companies, have global supply chains. Working capital is important and could manifest itself in the form of yield management, ROI and balance sheet improvement. This is a box on the RFP that vendors need checked. But the path is not easy.

Using Information Advantages to Finance B2B Transactions

We've all heard the stories around how supply chains are digitizing. A real transformation is underway, no doubt. But transformations don’t happen overnight. Likewise, traditional forms of financing supply chains still dominate. Many new models of lending have emerged over the last few years that rely on the approved invoices and third-party money, and while some models have generated volume, these pale in comparison with total B2B transactions. This is not to say there are not failures. In fact, the innovations that have been tried and failed lead to further innovation, piggybacking off of lessons learned. 

KYC for Supply Chain Finance is an Unmitigated Disaster

“Everyone has to take their shoes off at the airport.”   TSA Security   The title to this piece are strong words, and they are not […]

Carillion, Moodys and Accounting Transparency with Supply Chain Finance

Back in March, Moody’s came out with a note titled Carillion's collapse highlights shortcomings in the accounting for reverse factoring. Claiming the scale of the […]

What Finance Costs do Suppliers pay for Early Pay Finance?

Early pay options such as dynamic discounting, supply chain finance, and working capital platforms all offer a company a way to extinguish a receivable before […]

Payable Finance Myths & the Digital Age -Top Priorities of Major Providers

During the Lendit Fintech USA conference that I spoke at last week on digital supply chain finance lending, the attendees biggest interest was in two […]

Banks Need to Improve Predictive Analytics for Supply Chain Finance Programs

Dickie Greenleaf: Everyone should have one talent. What’s yours? Tom Ripley: Forging signatures, telling lies … impersonating practically anybody. Dickie Greenleaf: That’s three. Nobody should […]

Why Bank Originated Supply Chain Finance is Like the 1% Movement (and will it change?)

When it comes to supply chain finance (“SCF”) as many know, the supplier onboarding process for bank originated SCF programs is worse than a root […]