Cash against compliance
The number of documents required at shipment is increasing because companies need to know more about the products and services that they buy.
These new requirements are emerging from recent laws and regulations relating to modern slavery in supply chains and consumer advertising.
"Proof of source" means evidencing where products are made and who made them - to show that products are made without modern slavery.
"Proof of claim" means evidencing what products are made of; that's to substantiate environmental, sustainability or other claims that companies might want to make later when products are sold.
Cash against compliance is the solution.
This is the integration of new documentary ESG requirements at scale with supplier payments and supplier financing - a natural extension of Prima's cash against data technology.
This 4 minute blog covers:
What are the emerging compliance requirements?
What needs to be done?
How do we get it done practically, economically and at scale?
Who can do it?
Cash against compliance - a new tool for CFOs
The role of CFOs and Corporate Treasurers is to promote financial discipline in the supply chain.
Increasingly that discipline extends beyond transport documents, packing lists, purchase orders and invoices - to include ESG compliance obligations arising from the supply chain.
What are the emerging compliance requirements?
Regulations are already in place and new regulations arriving all the time.
Proof of source - modern slavery - examples
Germany: Lieferkettengesetz (German supply chain due diligence law)
EU: CSDDD, the EU Corporate Sustainability Due Diligence Directive
EU: ESPR, the new ECO digital passport (product-level), required in 2026
US: Uyghur Forced Labor Prevention Act, and the active operation of the Forced Labor Division of CBP, implementing WROs since 2018
Proof of claim - consumer advertising - examples
UK: Competition and Markets Authority actions (see here) under general consumer protection legislation
EU: GCD, the EU Green Claims Directive (see here)
US: Federal Trade Commission actions (see here) under general consumer protection legislation
The laws and regulations often apply generally to any company trading in a given geography, not just to companies based there.
What needs to be done?
Companies need to collect evidence in order to substantiate the claims that they might be making.
The evidence might include:
A BOM, a "bill of materials" which lists all the materials in the product
A sourcing map, which lists the suppliers through multiple tiers showing who provided the materials all the way back to the ultimate source
Inspection / compliance certificates for different steps in the supply chain
And this documentation is required is at product-level and not at supplier-level.
How do we get it done?
To make this happen, what's needed is a platform that can do the following:
For each buyer purchase order, ask suppliers for an appropriate "document pack" (specified by the buyer)
Provide a way for suppliers to upload the documents and digitize them
Analyse the documents and data to check them against the requirements - which can be automated
Store the documents so they can be produced on demand
In reality, most businesses will end up with small number of "document packs" relative to their overall business scale. Each document pack is the unique combination of specific documents needed for a specific set of proofs - but there can be a lot of standardisation. So the task can be significantly less onerous at scale than it sounds.
And on the supplier side, one document can be re-used for multiple purchase orders - for example, a factory inspection certificate or the in-bound purchase evidence of an organic material that has been used for multiple purchase orders. So there are efficiencies on the supplier side as well.
And, ideally, these requirements are implemented using "cash against compliance" so that supplier performance is linked to supplier payments.
Who can do this?
PrimaTrade's platform (see here) provides these capabilities.
Prima connects buyers, suppliers and financiers together in order to digitize the financial supply chain.
Each time a supplier ships, it uploads and self-digitizes all its trade, commercial, ESG and compliance paperwork - which is then used to drive automated instant payment approvals.
Instant payments can then be made to suppliers by the buyer, or by financiers, and the buyer can significant discounts as a result.
Cash against compliance adds the following to the standard process:
Buyers on Prima's platform can add additional document packs to purchase orders
Prima generates the list of required documents automatically when suppliers match purchase orders to shipments
Suppliers can then provide and self-digitize the required documents at shipment as part of their normal process
Prima can check and store the compliance documents along with commercial, transport and logistics data
Prima's capabilities to support proof of source and proof of claim processes at product level across the enterprise are easy to implement. They can be implemented standalone or alongside a supplier payment and supplier financing program.
Book a call here to find out more.