OB10 Express Payments – Supply Chain Finance gets another boost

Last month, OB10, the leading e-invoicing provider, announced a significant new product in OB10 Express Payments. This is another sign that the areas of e-invoicing and supply chain finance (SCF) are becoming a source of real innovation and interest to procurement (and  finance) professionals. If you’re not into it yet, you might want to take a look at what’s going on in this world. (Here’s a very good piece from Pete Loughlin at Purchasing Insight that touches on the OB10 development and wider SCF issues if you want to read more).

It’s significant that OB10 are making this move because they’re not a small start-up with an innovative but as yet largely untested idea. They’ll probably the leading e-invoicing firm in the market, with clients who include Tesco, GlaxoSmithKline, Kellogg’s, Unilever, BP, GM.. some reasonably large businesses there!

Express Payments is “a unique supply chain finance service that allows organisations to receive payment on approved invoices within three days”. Here's how the firm describe it.

“ By building on the benefits delivered by electronic invoicing – including faster invoice delivery and approval, and full visibility of payment progress – OB10 Express Payments offers a sought-after solution.

Once an invoice has been approved, suppliers can choose to receive guaranteed early payment direct to their bank within three working days. Suppliers agree to a discount in return for more immediate payment. OB10 Express Payments not only improves cash flow but also eliminates the costs of chasing unpaid invoices, streamlines collections processes and strengthens relationships with customers”.

One issue with both conventional supply chain finance, and even some of the recent more innovative initiatives in this area is that it relies on effective administration of the invoicing process. So if a bank is going to advance me money on the basis that my firm, an SME, has submitted invoices to a large firm, how does it know I’ve actually done so? How do they know it has been received, and that it has been approved for payment? These administrative issues can greatly increase the cost of the process, and are one reason why bank-driven SCF has never really penetrated into the long tail of SME suppliers and smaller invoices.

But linking the offer of prompt payment to an effective e-invoicing platform cuts through this.  The funding comes from the buying organisation (and many of OB10’s large clients are cash-rich businesses) and the information about the invoices, approvals and so on all sits within the platform.  A company can choose whether or not to take early payment, and can elect to apply it to one invoice, all invoices or a selection of transactions.

It’s also worth noting that OB10 have also announced partnerships in the last few days with both Infosys (leading BPO providers) and Coupa (P2P software). So the team has obviously been busy recently – and we’ll return to those partnership initiatives in more detail shortly.

 

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