Demica's SVP Avarina Miller in London has worked on many SCF implementations; her tips for a successful SCF programme are:

• the buyer has to be very careful that the books and/or balance sheet shows they are not involved in the financing of the programme, so the auditors do NOT interpret the financing as involving the buyer, and so convert it into financing payables on the balance sheet
• a structure is needed in which the buyer can be relied up to pay an invoice they have approved for payment either by enterings into some form of agreement with the funder of the finance which says once they have approved an invoice for payment, they accept/recognise that they are obliged to pay, and that they will pay on time without diluting the value or by other legal structures. (Because the buyer is confirming that an invoice is valid, it removes the fraud risk that exists in factoring where a supplier can invent an invoice, and so, in principle,  reduce % rate charged)
• in some European agreements, there is a direct statement between the funder and buyer to confirm this obligation to pay as well as a receivables purchase agreement between each of the suppliers and the bank which is where the terms of the funding are specified and which invoices are eligible
• it is necessary to overcome the concerns that such an agreement contravenes US GAAP rules due the buyer's direct contract with the funder was, in effect, a form of financing. There are alternative structures that get around this problem
• buyer does not to receive any direct benefits - fees or finance - from the SCF programme, and they must NOT pay after the due date. Alternatively, if they do then it may become financing for the extended period.
• IFRS is silent on the treatment of SCF programmes. Auditors are not all agreed on how to treat SCF. Ultimately, it depends on what each corporate's auditors say.
• suppliers want to be certain that they are getting the invoices off their balance sheet, i.e. they are getting cash and there is NO recourse in the event of buyer not paying. This is normally covered by the receivables purchase agreement. Moreover, the supplier needs to be able to warrant that there is no prior claim on the invoice.
• when banks pay invoices in a SCF programme varies, it is normally ASAP or Trade day 1 or day 2. It is covered in payment schedule with the supplier.
• not every company will want or need to set up a SCF programme and they will always take time to get going. Nevertheless, for a SCF programme to work there needs to be genuinely equal benefits for buyer and suppliers.