Q4 2013 may well be remembered as the inflexion point for AP automation and supply chain finance.
The synergy between e-invoicing and supply chain finance (SCF) has been recognized for some time but the reality of business is that despite the benefits staring us in the face, it takes time to put the pieces together and for it to become a reality. Software needs to be developed or adapted, marketing campaigns crafted and pilot programmes need to run their course. This all takes years. So when we see solutions emerging and new offerings launched, it’s not because everyone has suddenly seen the light – the early adopters saw the light a long time ago and what we’re seeing now is the culmination of years of effort.
The OB10 deal announced last week follows two years of behind the scenes discussion. Tradeshift’s $3bn fund to support small business is the realization of a vision that Christian Lanng shared with me about 3 years ago and just this week a new player on the scene, Crossflow Payments, emerged into the fading light of late summer after 3 years of research and development. I met Tony Duggan, the CEO, this week in The City of London to understand what they have to offer.
It has, I have to say, become a familiar conversation. The perfect storm; the need for small business to have access to affordable working capital; the regulatory distractions preventing the banks from playing a role in getting business moving again. And the solutions all seem to be variants of the same thing – putting affordable working capital in the hands of small business. But Crossflow Payments is a little different. And here’s why.
What makes Crossflow Payments stand out?
Offering free to supplier e-invoicing is becoming fairly commonplace nowadays and Crossflow Payments is no exception, however whereas other players offer portals and such, that transport simple proprietary messages over the Internet, Crossflow is an EDI platform – for free.
Now, in some industries, retail for example, old school EDI is endemic. It has some advantages – it’s bound together with mature standards so that everyone in the same industry is speaking (more or less) the same language but it is expensive. Expensive but essential. So to offer it for free and to offer migration to the Crossflow patform in a timescale of 30 days is extremely impressive. This is going to attract a great deal of interest.
In terms of what Crossflow offers today from an SCF point of view – it’s fairly standard stuff. Suppliers offered funds at a rate their financially stronger customer would normally get is always going deliver potential for a win-win. But it’s what they have in the pipeline for the future that I really liked.
There wasn’t time to look into the detail but my interest was certainly aroused by what Tony explained and I have no doubt that we will revisit this in the near future.
Pete Loughlin can be found on twitter @peteloughlin