Key Features to Consider in a Supply Chain Finance Solution

After COVID-19 the business world is buzzing about supply chain finance (SCF) benefits. With potential regulatory and legislative changes, companies of all sizes are turning to SCF as a top financing option. And the best part? There’s a plethora of tried-and-true methods and exciting new software platforms to choose from. Boost your working capital and seize the day with the perfect SCF solution tailored to your needs.

Learn How Supply Chain Finance Solution is an All-in-one Solution

To find the best SCF solution, seek one that caters to a diverse range of businesses and vendors. It should enhance payment speed and efficiency, surpassing disjointed and manual methods by offering to factor, dynamic discounting, and reverse factoring functionalities. By providing access to various funding options, Supply Chain Financing grants purchasers additional flexibility in tailoring a program that meets their unique working capital requirements. A multi-funder system enables businesses to obtain capital directly from multiple sources, such as banks, other financial institutions, and SaaS providers. Vendors’ fees to participate in an SCF program can vary more widely when multiple funding options are available.

Supply chain finance solution is never different from any other type of financing and involves the inevitable discussion of the potential loss. Invoice details, disputes, seasonal trends, discounts, missed invoices, supplier concentration, DSO and supplier-buyer interactions are just some of the metrics that can be analyzed with the help of analytics, which should be considered when choosing an SCF solution. Predictions concerning insolvency, dilution, days to pay, and fraud can be made using these analytics.

In-Depth Analytics for Supply Chain Finance Solutions & Reports

Investors and regulators are keeping a close eye on supply chain financing as it becomes a common method of payment for businesses around the world. Therefore, it is difficult for businesses to disclose supply chain finance agreements appropriately in their financial reports. To overcome this obstacle, businesses must find a way to get specific information and insights through comprehensive reports, analytics, reporting, and client credit monitoring. Investors and regulators can have a better understanding of a company’s true financial standing with the use of this data.

To effectively report on supply chain financing, it’s crucial to track spending based on several factors including the number of invoices, suppliers, and purchase orders, grouped by region, payment term, business unit, currency, and payment method. It’s also important to track spending quantity over time, categorized by area, business unit, classification, supplier, cash, payment term, and payment method. In addition, tracking supplier concentration and payment behavior, such as payment terms, approval days, and performance, are also critical measures for effective reporting on supply chain financing.

SCF Solutions Drive Innovation & Promote Growth Through Diversity

Supply chains that incorporate a wide range of vendors and distributors benefit businesses by increasing opportunities for growth. To gain deeper insights into customer needs, it is essential to build stronger relationships with essential suppliers, and foster a more innovative and productive workforce. Therefore, when exploring SCF solutions, it’s vital to inquire about a company’s support for DEI initiatives. When evaluating SCF solutions, it is not enough to focus solely on reporting metrics. It’s also critical to consider supplier diversity, inclusion, and equity programs.

The Takeaway
MSME Blog empowers small and medium businesses with expert financing, technology, and policy solutions to succeed in the global economy. The most effective SCF systems will have simple interfaces and quick deployment times. The best solutions are simple to understand, need little training, and can be implemented with minimal effort by both sellers and buyers despite their varying levels of familiarity with technology.

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