Finance for the supply chain is definitely no longer the sole province of the banks, not that it ever really was. Many providers of supply chain services are now also providing finance in many different ways, e.g. for the SME accounting service supplier such as SAGE it is an easy next step to add supply chain finance services. e-invoicing companies such as Tungsten already provide extensive services including taking deposits as well as supply chain finance.
TMS suppliers - Kyriba approach
TMS solution providers have been supporting supply chain finance in various ways for some time and are now redoubling their efforts. Kyriba, the cloud treasury management, have just recruited Eric Riddle former IQNavigator and Prime Revenue executive to “propel their global supply chain finance offering.” Riddle will be EVP of Supply Chain Finance at Kyriba. Eric brings more than 25 years of experience in the supply chain and procure-to-pay application software space, representing tech start-ups to Fortune 500 companies.
For Kyriba, SCF includes three main solution areas that serve both parties in the supply chain, the Buyer and the Seller or Customer and Vendor:
- Reverse Factoring – a buyer led programme in which the buyer offers early payment to its suppliers, usually in exchange for some kind of ask such as a payment term extension.
- Dynamic Discounting – a Buyer led programme in which the buyer allocates an amount of capital to pay suppliers early in exchange for a dynamically calculated discount on invoice value based on the tenor (days until maturity of the payable for the buyer).
- Receivables Finance – For Kyriba, this will include the option for both “disclosed” and “undisclosed” program option to the seller of receivables. While this has started as a one to one funder relationship between a seller of receivables and a purchaser, eventually, this will become a marketplace environment with multiple sellers and buyers of both confirmed and unconfirmed receivables.
Kyriba believe that with the breadth of their solutions, they will address the needs of the entire supply chain from the very large supplier, all the way down through the long tail. And, as you would expect, the Kyriba SCF platforms will be fully integrated with the Kyriba Cloud Treasury Management, Payment and Risk platforms adding for a natural native integration and flow of data providing full visibility and control over cash and working capital. Kyriba believe that, “This will make for a far more differentiated offering to new prospects for the TMS solutions, but also for SCF prospects who value an integrated, cloud based platform for the full control and actionable visibility.”
CTMfile take: In many ways the TMS is the natural place for adminstering funding of supply chains. Partnerships between TMS providers and the supply chain finance specialists can only grow. And having integrated SCF services will be a key differentiator for TMS suppliers.
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