Pushing Early Pay Opportunities To All Suppliers

Regardless if the US government's SupplierPay initiative is successful or not, many Global 2000 corporations have developed a menu of early pay solutions. Buy-side techniques are centered around payable finance methods.

Purchase-to-pay, e-procurement, e-invoicing and supplier network propositions are becoming more established together with early pay finance techniques. Large global corporations that use these networks to manage suppliers will enable their suppliers to receive early payment.

Some of these techniques are squarely targeted at certain supplier segments:

  • Approved Trade Payable Finance (or Reverse Factoring) – focused on tier-1 suppliers (spending $25 million or more as an example).
  • Dynamic Discounting – while many vendors bring a more than sufficient e-invoicing solution to the table, this method has typically been viewed as a long-tail solution. According to a recent Taulia survey, that may not be the case. The survey found the largest companies ($1 billion plus) are actually the most likely to accept a discount on all invoices (19% responded in the affirmative to this question). Small- and middle-market companies all responded in the 10-15% range when asked the same question. The jury is still out on this one.
  • P-cards – typically touch on less than 5% spend.

At our webinar last week, Nipendo talked about a solution with a customer that achieves 97% supplier participation across all spend categories and is finance is open to all suppliers regardless of size. I encourage you to check out the webinar here.

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