Vendor Supply Chain Finance (SCF) constitutes the transfer of a (trade) payable position towards the SCF underwriter (i.e. the bank). The beneficiary of the payment can then decide either to receive an invoice payment on due date or to receive the funds before, at the cost of a pre-determined fee.
The debtor’s bank account will only be debited on due date of the payable; hence the bank finances the differential between the due date and the actual payment date towards the beneficiary for this pre-determined fee. This article elaborates on why and how corporates set-up an SCF scheme with their suppliers.
The corporate landscape is being redefined by a plethora of factors, from new business models and changing regulations to increased competition from digital natives and the acceleration of the consumer digital-first mindset.
Analyzing data from a treasury management system and ensuring it is up to date and accurate is key to making effective decisions for any corporate treasurer. Over recent years, SAP has added an array of products in the data warehousing, reporting and analytics space to assist decision-making as well as address some of the historical weaknesses in its reporting capabilities.
Continuous Linked Settlement (CLS) is an established global system to mitigate settlement risks for FX trades, improving corporate cash and liquidity management among other benefits. The CLS system was established back in 2002 and since then, the FX market has grown significantly. Therefore, there is a high demand from corporates to leverage CLS to improve corporate treasury efficiency.
Royal FloraHolland has been on a journey to optimize their cash management processes. With a complex landscape consisting of two SAP systems and several banks, the choice was made to implement SWIFT’s Alliance Lite 2 functionality.