Invoiceware – Marrying Supply Chain Finance with AP Automation in Latam – Post 3

Our previous two posts looked at how eInvoicing is now mandated in manyLatam countries. Now we look at what you can do to marry Accounts Payable, Tax Compliance, and Financing.

Invoiceware is processing more than $84 billion annually on its business network. Now that Invoiceware has all this transaction value running through their network from multinationals, the next step is to provide additional value and they have launched a supply chain finance initiative.

They have a number of large institutions that are really interested in funding– banks, hedge funds, etc. given the Multinational obligor and Latam supplier risk. They are currently in the process of setting up SPVs in specific countries to funnel transaction invoices. Given their high volume and ability to tell within minutes of a supplier receiving goods that the invoice is good and okay to pay, they can offer their supplier base funding very fast. Because these invoices are digitized, you can get an ok to pay notice from the company within minutes, and you are able to offer supplier financing at attractive rates based on the obligor.

Invoiceware International’s supply chain financing solution delivers supplier liquidity through:

  • “Pay Me Now” Option: Suppliers have the ability to convert their invoices into cash within hours, instead of months for those that are “OK to Pay.”
  • Flexibility in Choosing Which Invoices to Pay: Unlike traditional factoring, all suppliers, regardless of credit, have the freedom to pick and choose which invoices to pay based on their unique cash flow needs, payment terms and billing cycles.
  • Lower Cost of Capital: suppliers having access to capital at a much lower rate than they would with traditional factoring or other solutions.

For investors, you can see what invoices are available and based on your investment criteria, policies, and parameters, fund those that match. The emerging yield opportunities are much greater than in OECD markets, and it will be interesting to watch how well their pilot creates flow over the next several months, especially since this solution focuses on total spend, not some small portion of it like reverse factoring or pcard solutions.

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