Tag Archives: Supply Chain Finance

GT Nexus Aids in Economically Beneficial Supply Chain Finance Program

While researching for our upcoming report on the current state of global electronic invoicing, images-2PayStream has found that eInvoicing adoption initiatives are growing throughout the world. We also found that one reason many countries are becoming more interested in B2B networks is the easy access to supply chain financing options they provide. In response to this demand, solution providers are enhancing their offerings to accommodate supply chain health, and companies of all sizes are benefitting from more financing options

In an innovative initiative of their own, IFC, a member of the World Bank Group, and Levi Strauss & Co (LS&Co). recently announced their plans to provide financial incentives for garment suppliers in developing countries. The ultimate purpose of their Global Trade Supplier Finance program is to upgrade environmental, health and safety, and labor standards. Estimates by the International Labor Organization (ILO) say that the textile, clothing and footwear industry employs close to 60 million people around the world, many of them young women. The Global Trade Supplier Finance program aims to benefit this sector and aid in poverty reduction among these workers.

images-3Here at PayStream, we’re always happy to hear of companies using their skills to promote and enable sustainability and equality in business activity. However, this news is even more welcome because the involvement of one of our partners, GT Nexus, in the program. IFC and LS&Co. launched this initiative with GT Nexus for the advantages’ their cloud-based business network and platform has for global trade and supply chain management. GT Nexus’ platform enables participants to operate across multiple supply chain functions, and it optimizes the flow of goods, funds, and trade information. Together, the three companies hope to encourage better business practices by providing incentives for these practices, and by making them easier for businesses to accomplish. GT Nexus global experience with diverse B2B regulations, including in Latin America, will be very useful towards this goal.

According to IFC and LS&Co, the Global Trade Supplier Finance program will adopt a tiered pricing of short-term financing for garment suppliers, with lower costs for those borrowers that score strong performance ratings under Levi Strauss & Co.’s environmental and social monitoring system-the Terms of Engagement (TOE). This system measures labor, health and safety, and environmental performance. The program will also offer these vendors lower cost rates on working capital financing. The higher the vendor’s TOE score, the more they will save.

PayStream believes that GT Nexus’ superior functionality and global focus will greatly help the success of this program. We look forward to seeing the good these companies will do together through technology, innovation, and optimism.

For more information on the current state of B2B technology around the world, look out for our upcoming 2014 Global eInvoicing report.

 

 

 

Global Support Spreads for SMEs

In the past week, PayPal has announced the launch of a new lending service for small and medium-sized businesses in the UK. This initiative, scheduled to start rolling in August, follows a similar program begun and successfully run in North America last September. PayPal’s Working Capital will offer cash-advances for smaller companies who cannot as easily utilize bank loans and lending services.

This alternative financing option cuts through several hoops for which SMEs often don’t have the paypaltime or money by replacing credit checks with existing sales histories, requiring only one fixed fee, and allowing a flexible and easy repayment program. PayPal has shown great interest in small businesses in that past—they’ve launched several education campaigns to help SMEs grow online. According to the Managing Director of PayPal UK, Cameron McLean, programs like Working Capital are essential because “small businesses are the lifeblood of the British economy.”

The attitude that SMEs are important in every economy is one that PayStream Advisors’ research has recently seen resonate throughout global markets, industries, and governments. In the world-wide economic difficulties over the last several years, SMEs have arguably suffered the most of the business sphere. Now, corporate and government leaders around the globe are taking initiatives to restore the vitality of this essential part of the financial eco-system.

obamaMuch of the action to help SMEs has revolved around making the purchase-to-payment process easier and faster. In North America, President Obama’s recent SupplierPay initiative has created partnerships between the federal government and several larger corporations to promote expedited payments to their smaller vendors, allowing those small companies to free up more working capital to grow their business and hire more workers. The UK has also launched several initiatives to spur small business growth over the past two years, including revamped VAT tax returns and more releases of educational market material on small business financing, such as the newly published Euro Banking Association (EBA) guide to the European supply chain finance market.

In response to government steps taken towards a more balanced trade market, solution providers have also enhanced their offerings with SME’s in mind. To complement SupplierPay, Taulia Inc. launched the Early Payment Quick Start Initiative, a program that encourages and simplifies early payment financing. TradeShift has also taken a stand to help the small and big business connection, both photo 2literally with their expansive supplier onboarding techniques, and vocally. In a recent interview on the business news show, Lou Dobbs Tonight, Tradeshift CEO, Christian Lanng discussed the importance of eliminating frequent late payments between big buyers and little suppliers to help the supply-chain and the economy as a whole.

PayStream’s research has found this increased focus on supply-chain financing in several more software companies, and from several more important global voices. We believe this focus on supply-chain financing is not simply a trend, but one that will increase as the rest of the world realizes the importance of maintaining a healthy SME eco-system. For more insight into the SME world and how solutions are working to create healthy performance in that world, look out for PayStream’s upcoming research report on automating payables for SMEs this Q4.

Newest Supplier Finance Solution: Nipendo meets Integrate Financial

Nipendo, a leading provider of procure-to-pay automation solutions announced yesterday that they would be joining forces with Integrate Financial, a provider of supplier network financing solutions. The intended outcome of this partnership is to provide a supply chain finance solution that is tightly integrated with the procure-to-pay process, allowing buyers to offer early payments to their suppliers that can be expected as soon as hours after submitting an invoice.

As a result of globalization and increased offshore sourcing, for many US companies a lengthened supply chain has resulted in a reduction of capital availability. This often results in an extension of payment terms to suppliers and thus a higher cost of money and riskier supply base. The obvious solution to this problem is supply chain finance—a solution that has been around for decades. Yet recent studies have shown that only a small portion of organizations offer trade financing to their suppliers. Increasing capital and compliance requirements have left banks offering fewer financing options. Nipendo and Integrate Financial have teamed up to significantly reduce the risks and barriers typically associated with receivable financing.

Nipendo’s invoice automation platform ensures errorless invoice validation, reception, compliance, and matching to allow for suppliers to get immediate notification of non-compliant invoices. This results in processing and approval for payment almost instantly. Integrate Financial uses the data made available by Nipendo to offer near-real-time financing. Embedded into the Nipendo Supplier Cloud, Integrate Financial can make on-demand pre-approved financing offers to suppliers. Small and medium sized businesses that have seen increased restrictions from more traditional financing methods will find this highly valuable.

PayStream is very excited to see what this partnership will mean for the procure-to-pay automation industry. Be sure to look for Nipendo in our AP & Working Capital report scheduled to come out this June.