The Knowledge > Supplier perspective A better way of...
SOLVING CASH FLOW WOES Electronic payments are the way forward, putting the control back in the hands of the supplier and for the benefit of the buyer, argues Robert Kirby, CEO of Spendvision
Robert Kirby CEO, SPENDVISION Robert Kirby has over 20 years experience in the expense management and payments industry. He co-founded Spendvision in 2004 and has been chief executive officer since that time. He previously held senior executive positions with Globeset, a global payments technology provider, in the US and later Australia. Prior to Globeset, Robert held senior management positions at Telstra and led the development and implementation of eCommerce and payments products and services.
ALL BUSINESSES focus on cash flow. It’s the lifeblood of commerce, and without focus the wheels of the business will get stuck in the rut of receivables collection, creating a level of inefficiency which is debilitating. To a buyer, the focus is on offsetting
the final point of settlement to get maximum use of their funds, while a supplier needs to have an accounts receivable team chasing late payments. This often leads to buyers having convoluted accounts payable processes that require managers to approve all invoices to
“An alternative approach is for the supplier to offer dynamic discounting to encourage faster payment”
ensure they have visibility of their departmental purchasing. All the while, this is slowing down commerce as departments transfer documents from one part of the company to another for sign off, approval and ultimately payment. The problem with this is
that, while the buyer enjoys the benefit of slowing down the payment, the supplier has to chase in order to track the payment. As a result, both parties lose out. The increased cost of the
receivables team is passed from the supplier to the buyer through the cost of the goods. The buyer has therefore built their own inefficiencies by maintaining a process that generates a reaction with the supplier. There is a better way. Typically,
small businesses are beholden to the payment terms of their customers, which are driven by accounting practices and business rules. However, an alternative approach would be to enable the supplier to offer dynamic discounting to encourage faster payment. This way, the invoice is presented online and the buyer can generate their own discount by choosing to push faster payment to the supplier. For instance, pay in two days, receive a ten per cent discount; pay in 30 days, a two per cent discount; pay in 60 days, incur an extra charge. This puts the control back in the hands of the supplier, enabling them to more effectively manage their cash flow – to the benefit of their customers, the buyers. There is also the option to add a range of commercial payment options that create value for both the buyer and the supplier. When the buyer wants to place an order they can generate an online
requisition for the supplier. This details their requirements and options to settle the invoice. What we are now seeing is the opportunity for financial institutions to start to drive these real- time payment solutions to their customers. Instead of buyers making payments on commercial cards, suppliers can be offered trade finance options that drive cash flow into the business on reasonable terms that include settlement in a matter of days, as opposed to months. Companies such as Syncada and PrimeRevenue are already enabling the online delivery of trade finance – and this is the next generation of cash flow management. The automation of this process is the
real key to unlocking the opportunity, and there are companies out there that do this today. The delivery of end-to- end supply chain efficiency should be demanded by every business on the planet to deliver best of breed benefits for buyers and suppliers. While Syncada and others can support this, the benefits of true supply chain efficiency can only be achieved by using one platform to enable all participants, large and small, to extract benefits in the process.
WWW.THEBUSINESSTRAVELMAG.COM I 13
BIGSTOCKPHOTO.COM
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84