Though financial supply chain management is not an entirely new concept, interest in the discipline has increased dramatically over the past year with the focus shifting from theoretical discussion to the practical implementation of programmes with tangible benefits. Interest has been driven by banks seeking to adapt their transaction banking product offerings to new market conditions, as well as buying corporate looking to squeeze added value from their existing procurement arrangements.

The physical supply chain can be defined as the activities involved in planning and executing the movement of goods and their documentation, while the financial supply chain describes the activities involved in planning and executing payments between trading partners - what could be described as the order-to-cash and the purchase-to-pay cycles for suppliers and buyers respectively. For every physical movement of goods between supplier and buyer, there exists a financial flow travelling in the opposite direction. Financial supply chain management involves taking a holistic approach to these processes in order to achieve a range of benefits that include improved efficiency and visibility across the supply chain and a more favorable working capital position.

A distinction should also be drawn between what can be defined as 'supply chain services' and 'supply chain finance'. The former refers to the realm of providing services in order to increase supply chain efficiency - services that are not necessarily finance related such as the dematerialisation of paper invoices or an increase in straight-through processing (STP). Supply chain finance (SCF), on the other hand, relates more specifically to providing the appropriate financing facilities at the relevant points in the physical supply chain.

From the buyer's perspective, offering financing in this way represents an opportunity to more effectively manage relationships with suppliers and increase payment terms without damaging goodwill between trading parties. And from the perspective of the supplier, the main benefits relate to improved cash flow as reduced days sales outstanding (DSO) mitigates the need for working capital during the production process.

USP

• Supply Chain Community based workflow definition
• Electronic Presentment & Acceptance of  Pro-Forma Invoices/Purchase Orders / Invoices/Credit-Debit Notes
• Dynamic Invoice/Bill Designer  
• Flexible Product definition for Pre-Shipment/PO Financing,Post-Shipment Finance,Invoice Discounting,Invoice Financing,Factoring and Reverse Factoring Services 
• Powerful Limit Management,Limit Tracking & Exposure Monitoring 
• Delinquency Tracking and Management 
• Overdue Loan Management 
• Dynamic Discount Management 
• Different methods of Interest & Fee calculation 
• Robust Rule Based Reconciliation Engine for Reconcilition of Invoices with Payments,Collections,Purchase Orders & Credit-Debit Notes
• Dynamic Cash Flow Forecasting 
• DSO and DPO tracking for working out Cash Conversion Cycle
• Powerful File Consolidator to map various file formats for ERP reconciliation
• Proactive & integrated risk management  and tracking through alerts and exception reports 
• STP to unlock the working capital 
• Robust,Secure and Web based platform

Benefits to Suppliers

• Effective Management of the cash conversion cycle by managing the Days Sales Outstanding
• Unlock the working capital
• End to End Receivables Collection Management
• Enhanced cash flow forecasting
• Straight Through processing of Receivables
• Enhancing the relationship value with Dealers

Benefits to Dealers

• Easy accessibility to low cost working capital
• Dynamic Discounts/Rebates on early payments
• Effective management of Days Payable outstanding
• Enhanced cash flow forecasting
• Straight Through Processing of Payables
• Enhancing the relationship value with Suppliers

Benefits to Banks

• Greater Fee based income
• More Fund based income
• Cross Selling Opportunities
• Partner with the customer in unlocking the working capital
• Enhancing the relationship value with suppliers & dealers