Supply Chain Finance Moves Beyond the Standalone

OCTOBER 30, 2012

Banks and suppliers have been talking up end-to-end supply chain finance solutions for a number of years now, but in order to make that happen it was essential to have a strong platform to pull together information from the disparate entities that touch a good as it moves along the chain – from raw materials to shipping, and from finished product to distribution. The technology platforms and connections between different pieces of the chain – so necessary to make this a reality – are now possible. This could help both buyers and suppliers to better-manage working capital and take some of the risk out of SCF for banks – which they can then pass on to clients.

A comprehensive solution must connect the documentation trail – from purchase order to shipping documents, invoicing and payment – to the financing offered at each step. Laurent Tabouelle, managing director of software provider CODIX, notes: “By offering different elements on a stand-alone basis, they are often in competition, as it is all financing based on the same collateral. If you don’t create a link between, for example, purchase order financing and shipping document financing, you risk financing the same collateral twice.”

Source: Global Finance