Upgrade to digital SCF
Supply chain finance ("SCF") is a 20 year old product - and there is little difference between the platforms that support it.
Digital supply chain finance is an upgrade - addressing the limitations of the basic SCF product and taking the solution to the next level.
It's a 2 minute read!
Why upgrade to digital SCF?
The upgrade to digital supply chain finance (SCF) is straightforward - and it turns the basic SCF product into a solution that works properly.
Most corporate treasurers and CFOs comment to us that they are not that happy with the basic supply chain finance product:
Early payments are not very early
Supplier utilisation is low
The suppliers who need the liquidity are not eligible for the program
The buyer, who does the work, has little control over how the product is deployed and used in practice
Digital supply chain finance addresses these issues with a new approach.
The digital model enables:
Early payments to be truly early
Supplier utilisation is therefore high
Automation so all the suppliers can be supported
Big savings that can be monetised for buyers
What's digital about digital SCF?
It is all about data.
The basic supply chain finance product is driven by data from the buyer's accounting system ("ERP").
The problem is that buyer accounting systems are only updated after delivery and after buyer approval processes have completed - which can take many days or even weeks. This means that early payments are not very early and the rest of the issues broadly flow from there.
Fix the data problem - fix the program.
And that's the point - by digitizing the paperwork from the supplier, it is possible to get data much more quickly - and that leads to automation, instant payments, high value being provided to suppliers and so high utilisation.
Does digital SCF mean digital bills of lading or digital bills of exchange?
No.
The good news is that digital supply chain finance is fully compatible with new e-BLs and e-BoEs, but you do not have to use them.
Digital supply chain finance is about getting data to flow more quickly from suppliers so that buyers can approve instant payments - and all this simply leads to a much more efficient proposition.
How do I start?
The next generation of supply chain finance platforms works this way - driven by supplier data and not data from the buyer ERP.
Since suppliers do the work, digital supply chain finance is "IT-light" in implementation. There is no big work for the buyer to do - it is all done in the way that data is captured from suppliers and then used to drive the process.
In fact, it is easy to take an existing supply chain finance program and upgrade it to digital.
The existing platform, funder documents and process remains in place.
Switch off the approved payable file from the buyer ERP.
Switch on the same file, but from the digital SCF platform instead, which will deliver the file based on supplier data that comes immediately after shipment.
Starting is really easy - just give us a call - click here.
Moreover, since digital SCF is powered by suppliers, you can try out the concept with a few suppliers to see how it works without any commitment.