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2024 customer feedback on SCF

2 MIN READ
Jan 2, 2025

During 2024, at PrimaTrade we spoke to over 200 corporate treasurers and CFOs about making supply chains work better in order to improve both working capital and margins.

Here are 3 take aways from customer feedback on SCF from those conversations.

3 things customers told us in 2024 about SCF

1) Effective SCF requires wins for procurement

Many companies have implemented working capital KPIs for senior management. But Treasurers are facing a challenge when trying to deliver working capital outcomes.

Supplier relationships are typically owned by procurement.

And procurement colleagues have their own KPIs, usually based on "intake margins" - minimising the price of what is being sourced.

Treasurers are looking for supply chain finance programs that can deliver both working capital wins and margin improvements.

Then both Treasury and Procurement can hit their KPIs.

Getting procurement on board enables the whole organisation to get behind corporate standards for payment terms, simplifying processes, maximising intake margins and rolling out supply chain finance across the whole enterprise.

2) Early payments are good but does SCF really deliver?

Suppliers do want to be paid quickly. If suppliers can be paid at shipment, they no longer need credit insurance and their own funding can start to work much more efficiently.

And the promise of SCF is excellent:

But SCF programs are generally not delivering. Treasurers criticise existing SCF programs for three main reasons:

We need to address these points if SCF is going to progress beyond a niche solution for a handful of suppliers - and deliver real value across the enterprise.

3) Active management of SCF funders

The last 10 years has seen an explosion in the number of SCF programs. These programs are typically run by a single bank that "fronts" the program and syndicates the exposures.

This first phase of the SCF roll out has validated the concept, but not delivered on the expectations.

Quite a number of SCF programs are now being reviewed:

This means a multi-funder platform, capable of dynamically allocating funders in real-time to shipments, as shipments come through from suppliers.

Upgrade SCF

Funder allocation is based on cost and funder credit / compliance appetite, automatically delivering the right paperwork and process for each funder.

What's the answer?

Upgrading SCF is a technology problem. The first generation of platforms are all pretty similar and only work up to a point.

PrimaTrade provides the next generation solution.

Our platform enables active management of multiple, concurrent, funder participations, automates invoice approvals at shipment and delivers monetisation of early payment discounts. We can scale SCF across the whole of your enterprise.

Check out this short post for "Why corporates uses PrimaTrade".

Do get in touch to find out more here.

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