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TFM Reader Mailbag

Over the holidays, I tried to figure out how to incorporate reader correspondence into Trade Financing Matters to make the site more interactive and not […]

Can Transactional Finance Provide Valuation Bumps to P2P Tech Companies? (Part 1)

I have been asked countless times about how vendors get compensated when they enable finance. The question typically goes, “How does Taulia or Basware or C2FO make money off finance?” The answer is not so simple — an implementation fee, a subscription fee and perhaps a 20% to 25% gain share on the income earned. Who knows? What you really need to understand is who should get compensated for risk and what’s the value of information to funders. For many banks that have funded vendors, the value on the approved invoice is the integration work that vendors have already done.

Ariba and Trade Financing: Discounting 1.5% of Network Invoice Volume is a Start

e-invoicing

In banking, technology and treasury circles, one rarely hears any mention of Ariba in regards to trade financing these days. Compared with other B2B tech plays making plays these days on the financing side around new or expanded initiatives such as Taulia, Basware, C2FO, Kyriba, Prime Revenue and others – often times in very different ways and different markets – Ariba has been relatively quiet of late surrounding new initiatives. (But there does appear to be some activity behind the scenes – more on this in the next installment of this series.) The one area that Ariba has quietly been promoting is invoice discounting adoption. This is not bad. In fact, it probably makes Ariba one of the larger providers today with an electronic invoicing or supplier network capability tied to some type of invoice discounting solution.

An Internal Checklist for Procurement: Are You Ready to Implement a Trade Financing or Invoice Discounting Program?

procurement checklist

With an increased awareness over reducing supply risk and implementing working capital programs, the world of trade financing is increasingly coming to procurement and supply chain organizations. In addition, many procurement organizations are entering new levels of maturity with their purchase-to-pay (P2P) programs and systems that can serve as a foundation for a range of trade financing initiatives, starting first with approved invoices as a trigger for early payment. But trade financing can appear complicated from the outside. To assess whether you’re ready to take the plunge in developing and implementing a broader trade financing strategy with a procurement-centric (i.e., holistic supplier engagement that balances a range of elements) model in mind, you need to ask yourself a few questions first.