Payments and Supply Chain Finance – an Excellent Lesson from Basware’s Ad van der Poel

We reported recently that Finnish technology firm Basware has acquired Procserve, the London based eMarketplace business, and you might even have noticed that the logo in our Associate Sponsor section subtly changed to Basware from Procserve recently! So welcome formally to Basware, who have not worked with us as sponsors previously, although we have known them well since we first started this website.

We will have more shortly on the coming together of the firms, and certainly more on the very hot topic of eInvoicing and supply chain finance, which is Basware's core business. But today, just a short but incredibly useful piece of education, from Ad van der Poel, SVP of Financing Services at Basware. Before he joined the firm last year, he gained 20 years of experience in the field of payments and cash management, latterly with Bank of America.

We met him recently, and in the course of a longer discussion, he told us that he looks at supplier payment, working capital and supply chain finance (SCF) as consisting of four key factors. Now as someone who has struggled at times, being honest, to get my head around SCF and all the intricacies of the subject, I listened intently at this point. (In fact, I desperately scribbled down his words as fast as I could)! So here are his four factors.

  1. The payment method – is it Card, bank transfer, cheque, cash ...
  2. The funding of the payment – directly from the buyer, or a Card firm, or a finance provider, which could be bank or other ...
  3. The timing of the payment – the payment terms, or any early or indeed late variants on the formal terms.
  4. Any discount applied to the payment - obviously only if required or demanded, presumably for prompt or better than terms payment.

That struck me as a simple but very comprehensible and helpful way of thinking about payments and supply chain finance, and understanding what an organisation should consider when developing a strategy in this area. Thinking through those four areas would certainly help to idenitfy the key issues and range of options increasingly available to buyers and indeed sellers.

We will go into the different points in more detail shortly, and in fact we can tell you that our Spend Matters Hot Topic for September is going to be eInvoicing and SCF. So more to follow, but thanks to Ad van der Poel for helping to get some of this straighter in my own mind, at least!

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