The Keys to Effective Supplier Financing Programs
Supply Chain Finance must be a collaborative effort with complete information transparency and integration across internal teams and systems. To be effective, CFOs and finance teams require visibility into working capital and excess cash and technology alignment between Supply Chain Finance and supplier payment workflows.
1) Cash and Liquidity
With visibility into cash, liquidity and working capital, CFOs can determine the priorities of the supply chain finance programme - namely cash accumulation through DPO extension or earning implied returns on excess cash and liquidity via direct supplier discounts. Treasury’s responsibility is to supply the CFO with perfect visibility into existing cash balances - by currency and by region - as well as a predictable cash forecast to understand the time frames that cash is available or required for. Only with an accurate cash position and forecast can CFOs be effective in controlling cash, improving working capital, and earning risk-free returns through supply chain finance.
Visibility and control of payment workflows is critical for supply chain finance programmes to efficiently function. The integration, within a single cloud platform, of payments with the supply chain finance portal allows payment terms to be automatically updated, ensuring that payments do not require manual intervention to be routed to suppliers. This automation and integration allow supplier payment workflows to be aligned with internal payment policies and controls, reducing the risk of payment fraud.
3) Supply Chain Finance
CFOs need the flexibility to support reverse factoring and dynamic discounting programmes to meet their changing cash and liquidity priorities. While these priorities may change based on financial scenarios, the technology to support supply chain finance must be adaptable and fully integrated. To be effective, a supply chain finance portal must be:
Kyriba is the global leader in cloud treasury and finance solutions, uniquely integrating cash management, payments, and supply chain finance in a single cloud platform.
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