Supply Chain Finance
Fuse the physical and financial supply chains
Fuse the physical and financial supply chains
Capital-related risk has a direct impact on the health of the supply chain. A networked approach to buyer-supplier-finance-provider relationships can enable data to power new, innovative financing programs. Suppliers have more options for obtaining cash at reasonable rates. Buyers alleviate pain and stress in their supplier relationships. The supply chain, as a whole, operates in a healthy, collaborative environment. In the end, the brand with the strongest and most reliable chain prevails.
Working capital optimization should be looked upon broadly. Financing at various points in the supply chain lifecycle helps buyers free up working capital and assure supply. Finance providers, partnering with Infor, offer buyers and suppliers innovative financing options utilizing the rich commerce data available on the networked platform.
Earn a higher return on cash and reduce cost of goods by offering invoice discounting programs to suppliers. Automation of the procure-to-pay process results in faster invoice approval, optimizing discounting opportunities. Offering rates lower than the supplier’s borrowing costs, minimize cost of capital, assure supply, and reduce cost of goods. Program management can be enabled to offer configurable rates by region or supplier to maximize adoption.
Provide suppliers the ability to get paid early on invoices at rates based on the buyer’s credit. Suppliers get paid within days of the invoice approval, at rates that are significantly lower than other financing options, reducing borrowing costs and improving working capital. Buyers can extend or standardize payment terms without impacting suppliers and ensure a healthy supply chain. Coupled with Procure-to-Pay Automation, the invoice approval process is accelerated so suppliers can get paid even earlier.
Traditional financing is based on standard documents, terms, and supply chain events, and has limited capabilities to inject financing at the time of purchase order. The GT Nexus Commerce Network uses big data to provide insights and reduce risk, making purchase order financing more available. Suppliers can access the capital needed to accept orders they would otherwise been forced to turn down. This also helps reduce delivery risk and improves performance in the supply chain.
Post-shipment (or post-export) financing enables suppliers to receive payment at time of shipment. The shipping documents created on the Infor GT Nexus Commerce Network are used as evidence of a receivable so that suppliers can get paid early versus waiting until invoice approval.
Incentive-driven financing helps companies improve overall supply chain performance, including delivery, social, and sustainability metrics. Suppliers can quality for advantageous rates based on the strength of the buyer and the supplier’s performance against buyer-defined metrics for social and sustainability standards. Rewarding suppliers for meeting a buyer’s corporate social responsibility standards provides a win-win for the overall supply chain.
Payment protection provides an additional level of assurance and provided at a lower cost than vehicles such as letters or credit or credit insurance. It protects the seller from buyer payment default and helps drive better financing rates. The rates are based on the buyer’s credit but the assurance is provided without impacting the buyer’s balance sheet.
Squeezing suppliers is ultimately self-destructive. Modern enterprises who want to think holistically about supply chain performance can now wield powerful, data-driven supply chain finance programs that are mutually beneficial to buyers, suppliers, and finance providers alike.
Conscious consumers are looking at what a brand represents and quickly turn on their preferred brand if no longer aligned with their own principles. Offering supply chain finance programs can ensure a strong supply chain, healthy supplier relationships and help improve environmental, social and sustainability compliance. In cooperation with a financial institution you can secure your labor, or performance standards, in exchange for improved financing rates.
High-interest loans and long payment terms can cause suppliers to take quality shortcuts, or go out of business. On the Infor GT Nexus Commerce Network, best-in-class organizations can provide suppliers access to capital throughout the entire transaction lifecycle, on-demand, including pre- and post-export financing, and early payment through integrated trade finance programs.
Wielding supply chain finance, buyers can use their payables to earn a higher return on their cash by offering to pay suppliers early and at rates that are good for both parties.
Companies can standardize and extend payment terms without impacting suppliers by providing them access to early payment at preferential rates. Suppliers can leverage their receivables for cash. Buyers can provide their suppliers with payment protection via the network, as an alternative to costly letters of credit, without impacting the balance sheet.