09 Apr 2014 Supply chain finance facility that leverages real time invoice validation
I’ve become a fan of Nipendo. Nipendo offers, in many respects, what I see as the next evolutionary stage in Purchase to Pay. Rather than simply offering clever means to automate the traditional steps in the purchasing process through things like e-procurement and e-invoicing, they offer what I think of as ‘Packaged P2P’. When I visited some of their customers recently I spent time with Eyal Rosenberg, their CEO and we spent quite a bit of that time discussing how the Nipendo platform could be leveraged to offer supply chain finance. And now they’ve done it and the press release that accompanies their new partnership with Integrate Financial explains the synergy.
While supply chain financing has been around for decades, very few suppliers have been able to take advantage of it to-date. A 2013 survey by the Institute of Financial Operations shows that only 5% of the organizations interviewed had any plans to offer trade financing to their suppliers.
“With banks facing increased capital requirements and more stringent compliance requirements, accessing working capital is ever more challenging for suppliers,” said David Gustin, President, Global Business Intelligence, Managing Editor, Trade Financing Matters and friend of Purchasing Insight. “By providing real-time visibility to receivable worthiness and partnering with a non-bank capital source such as Integrate Financial, Nipendo is expanding the range of available trade financing options at a time of great need.”
Real-Time Invoice Approval Expedites Supply Chain Financing
Nipendo and Integrate Financial employ a range of advanced technologies that significantly reduce the risks and barriers typically associated with receivable financing. To begin with, Nipendo ensures that only valid and errorless invoices enter the buyer’s Accounts Payable system. Before an invoice is received on the buyer side, it is preemptively validated by the Nipendo platform for data accuracy and compliance with the buyer’s requirements. In addition to data validation, invoices are also matched with purchase order and receiving records, all in real-time. Suppliers get immediate notification if an invoice is non-compliant, so they can correct any issues before the invoice enters the buyer’s accounting system and avoid any delays. As a result, close to 100% of the invoices are processed and approved for payment within minutes.
Integrate Financial leverages the information made available by Nipendo to offer near-real-time financing. Seamlessly embedded into the Nipendo Supplier Cloud, Integrate Financial can make on-demand pre-approved financing offers to suppliers at the right time, in the right place, and based on the best information available. This is highly valuable to small and midsized businesses that need working capital yet have seen retrenchment from banks and credit markets.
“The performance data in Nipendo is more valuable than purely financial data, allowing Integrate Financial to offer short-term financing that is more efficient, more timely, and with better results to all involved,” said Integrate Financial CEO Zalman Vitenson.
A Range of Financing Options for Every Buyer and Supplier
Organizations that use the Nipendo Supplier Cloud have access to a dynamic discounting module that seamlessly combines multiple financing options where corporations can put their balance sheet to work to finance their own supply chain, coupled with a third party model where Integrate Financial will step in and provide financing.
Integrate Financial is joining the growing number of solution providers that are taking advantage of the Nipendo open platform architecture and business model. “We strongly believe that the integration of best-in-class solutions such as Integrate Financial into the Nipendo Supplier Cloud is a tremendous source of value to the buyers and suppliers connected to our platform,” said Nipendo CEO Eyal Rosenberg. “Integrate Financial fills a void in the trade financing landscape that our customers will greatly benefit from.”
Pete Loughlin can be found on twitter @peteloughlin