What is Supply Chain Finance?
When businesses that trade – that is buy and sell goods – are looking to boost their working capital, they may consider a supply chain finance (SCF) program. SCF was traditionally only offered by banks to large corporates. Supply chain finance providers vary in terms of their financing criteria, process, and capabilities.
A Working Capital Boost
The supply chain finance program provides up to 120 days of credit to buyers. Under this arrangement, suppliers are paid upon the shipment of goods and the buyer is given an opportunity to improve their accounts payable days (DPO). This optimizes the cash conversion cycle (a measure of how long input is tied up in production and sales before it is converted into cash received).
Who benefits from Supply Chain Finance?
An SCF program is advantageous to both the buyer and the seller in a trade partnership. The buyer can purchase goods on open account terms, enabling the business to sell products before paying for the goods. Simultaneously, the supplier is paid upfront by the SCF provider, without any risk of non-payment.
Simplifying the Procure-to-Pay Process; #dltledgers blockchain
To enable better cashflow, #dltledgers provides buyers with a streamlined approach to vendor and procurement management with a blockchain platform. With #dltledgers, buyers can initiate orders and track fulfillment and payments in one easy-to-use paperless system. The platform also allows for improved communication between buyer and supplier.
Who qualifies for a Supply Chain Blockchain?
SCF providers have varying criteria for businesses to which they can provide a SCF program including annual revenue, industry, and geographic location. #dltledgers typically work with large corporates and middle-market businesses from nearly all industries, located in North America, EMEA and Asia. Suppliers can be located in most countries worldwide.
What’s the first step?
Importers with a focus on growth that are looking to increase their working capital or have access to liquidity as needed should use #dltledgers blockchain platform for supply chain finance digitisation. With #dltledgers, the process is clear and uncomplicated. The first step is to contact #dltledgers for an introductory free consultation on phone to get to know the business. Get started today.