Historically, Supply Chain Finance was very much supplier led. The aim was to extract value from unpaid invoices. By selling the outstanding invoices to the bank, a supplier can receive payment immediately. Of course there is a cost involved but faced with a wages bill due next week and an large order that needs fulfilling yesterday, immediate payment can be highly valuable even at what might be an equivalent annualized cost in excess of 20%. In it’s place and at the right time, it’s a powerful tool but it works best for suppliers with high values or volumes of transactions.
Supply chain finance is increasingly seen as a source of significant saving. By using supply chain finance tools and techniques, whether that’s simply managing payment terms better or whether it is by using more sophisticated techniques like dynamic discounting or reverse factoring, significant commercial benefit can be derived. Treasury managers are taking it more seriously but in many cases they are ignoring one of the biggest sources of saving and it’s right under their noses.
Supply Chain Finance and Working Capital Management are important tools for any business and in 2012, there are compelling reasons why now is the time to adopt financial supply chain management tools in earnest and today we are delighted to make available a new white paper "Supply Chain Finance - extracting value from the supplier tail"
There is an economic perfect storm. A combination of constrained liquidity – business struggling to maintain a line of credit – and very low interest rates. This makes it less attractive for businesses to hold on to cash but very expensive to borrow.
The ability for a buying organization to leverage Supply Chain Finance is predicated on the assumption that you are able to manage accounts payable efficiently and effectively, which in turn is reliant on purchase to pay process being sound. This is rarely the case and poor P2P processes can be a serious blocker for some areas of spend.
But not all areas of spend are created equally. For some categories of spend the balance of power between the buyer and supplier can make strategic relationships untouchable and, where hard core supply chain process are in place, the complexity of the P2P process makes it difficult to manage.
SciQuest last week announced a new Accounts Payable offering as part of its “source-to-settle” solution suite. The new product features expanded functionality for automating accounts payable, “eliminating manual processes and providing powerful insight for finance and procurement staff.”
I spoke to Max Leisten at Sciquest to understand a bit more about the new string to their source to settle bow.
Bloggers and tweeters don’t go too far off piste normally but there is nothing quite like sub-standard telco customer support to drive even the most focused to go right off topic and declare their frustration at their mobile phone operator or ISP. Customer support only needs to be a little bit wrong to make a dramatic difference to user experience and we are all so used to expecting best in class service that even a 10 minute wait to be dealt with by a call center can get us really piste off.
It’s not just consumers that need to be kept happy. Business software needs to deliver a great user experience too. OB10 will hold their hands up and admit that their customer support hasn’t been their strong point in the past and that’s why they’ve invested heavily in customer experience. Their newly unveiled portal is a massive improvement both in substance and style.
A torrent of tweets amplified one another over the last few weeks about the apparent enormous current interest in e-invoicing in the United States. Apparently, 42% of companies – a sizable proportion by any standard – are evaluating their electronic invoicing options.
They were all quoting from the very fine report published recently by PayStream Advisors’ e-invoicing Adoption Benchmarking Report. But unlike the many tweeps who were excited by this, I was a little underwhelmed and in my opinion, there was some much more interesting revelations in the report.
Ask anyone who’s worked in more than one purchasing organization. When it comes to technology, they’re not normally what you would describe as model implementations. Supplier data all over the place, catalogues out of date, Heinz 57 varieties of purchasing system. Purchase to Pay processes are very rarely joined up and if purchase to pay really is the plumbing of your organization, you’d be drowning.
But before you beat yourself up about your role in this chaos, ask yourself the question: Why is it that everything is always a mess?