Event-Triggered Finance Goes Beyond Invoice Discounting: Welcome to the New Era of P2P and Supplier Networks

My colleague David Gustin recently penned an outstanding white paper that outlines how event-triggered finance can change the receivables and payables financing worlds (including factoring) for good. In the analysis, he takes the worlds of invoice discounting and supply chain finance a step further, investigating scenarios and models that those with a high-level understanding of these capabilities have today. It’s truly essential reading for procurement, accounts payable and treasury and especially chief procurement officers (CPOs) looking to gain a better understanding of the trade financing opportunity in the supply chain.

In the coming weeks, we’ll be taking a look at the paper, “On-Demand, Event Triggered Finance With Network Models – A Game Changer?(free with registration), in significantly more detail. In the meantime, here is how David frames the argument:

“The talk about supply chain finance, and in particular new ways of financing commercial transactions, be they international or domestic, has mostly just been that, talk. Most of the developments have been around financing suppliers off an approved buyer invoice, which makes the risk easier to manage.

Finding ways to finance deeper in the supply chain, off of purchase orders or materials ordered, is much more difficult. A lot has been promised of financing supply chains throughout the P2P lifecycle, including assuring supply continuity, cheaper costs, healthier suppliers and even sustainable supply chains.

But can the new networks that are now being put in place to manage supplier data and document connectivity be the answer? This paper looks at some of the issues around event-triggered finance and if we can move beyond just approved invoice finance models using information contained within the networks.”

I work closely with David on these topics, and in this analysis, I must say the guru has become the philosopher as well. If you only read one analysis in 2015 on the intersection of trade financing and P2P/supplier networks, read this.

Download the full paper: here. We also encourage you to investigate our deep, subscription coverage of trade financing, invoicing discount and P2P on Spend Matters PRO.

In addition to Spend Matters PRO research, David and Jason offer workshops, lectures and advisory services to corporations, banks, private funds, consultancies and technology providers that want to learn more about the trade financing ecosystem and its intersections with new technology products and platforms. Contact them directly to learn more: jbusch (at) spendmatters (dot) com or dgustin (at) tradefinancingmatters (dot) com.

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