Supply chain finance is a financial tool that helps businesses manage their cash flow and working capital by providing financing solutions to suppliers in their supply chain. It can help suppliers get paid earlier, while also helping buyers manage their payment terms and cash flow.
There are several types of supply chain finance programs, including reverse factoring, dynamic discounting, and supplier financing.
Reverse factoring, also known as supply chain financing, allows suppliers to receive payment for their invoices earlier than the payment terms agreed upon with the buyer. The buyer's bank pays the supplier, and the buyer repays the bank at a later date, often after the goods have been received and accepted.
Dynamic discounting is a type of supply chain finance that allows a buyer to offer its suppliers the option to receive payment earlier in exchange for a discount on the invoice. The buyer's bank pays the supplier the discounted amount, and the buyer repays the bank at a later date.
Supplier financing is a type of financing provided directly by the buyer to the supplier. It can be used to fund the supplier's working capital needs or to finance the production of goods for the buyer.
Overall, supply chain finance helps businesses manage their cash flow and working capital by providing financing solutions to suppliers in their supply chain. This can help strengthen relationships with suppliers and improve the efficiency of the supply chain.
Qube Supply Chain Finance Added Value
PRI® Supply Chain is a proprietary payables & receivables management platform, supported by Qube Servicing, generating improvement of working capital by accelerating the payment cycle and turning receivables into cash faster.
The PRI® Supply Chain platform manages, controls and monitors , on a daily basis as well as intraday, all tasks defined as part of supply chain finance to ensure:
- Enhanced visibility of approved invoices;
- Accelerated collections processes;
- A low-cost financing option; and
- Streamlined account reconciliation and forecasting.
PRI® Supply Chain has been developed based on the in-depth experience with supply chain finance as well as receivables finance with the objective to have a fully front-to-backend automated supply chain finance platform based on historic and actual creditor data which to provide full insight & transparency which will be evidenced by demo on request.