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| Case B: Payables Management & Financing Solution |
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Opportunity Enabled by Premium Technology's Payables Management & Financing Solution
Implementing a complete Premium Technology's SCF web based solution would synchronize
the physical and financial supply chains and, thereby allowng FI's to provide Corporate
CFOs and treasury managers with a tool that enables them to enhance working capital capabilities:
- Gains trans-supply chain visibility that spans all trading partners, improving internal controls and risk management
- Gain early warning into problems, clearly identify individual transactions and document flow associated, and
reconciliation and plan/execute corrective actions
- Make accurate cash-flow forecasts based on real-time receivables knowledge
- Eliminate expensive, non-productive float
- Secure more favorable terms for the working capital that is required, as the granularity
and depths of financial information would allow lenders to assess the real composition and
quality of receivables
- Reduce working capital needs through effective inventory control and cash flow management,
representing significant annual savings
- Reduce Days of Inventory Held (DIH)
- Corporate Treasury Funders can lower financing rates on required working capital through
more effective management of its current asset position
- Reduce the costs of risk management through greater cash flow predictability
- Allow finance teams at the global, regional and country levels to obtain comprehensive
information on accounts and transactions in real time
- Process complex vendor financing transactions (Extensions, Partials, Variable Adjustments
to Financing Limits)
- Improve vendor relations for buyers
A simplified process entails:
Vendor
- Fulfills PO and invoices Buyer for $1MM
- Provides terms of 90 days
- Views web portal for future payment detail
- Elects to obtain early payment
- Vendor receives immediate cash at a discount, based on negotiated terms
Treasury/Funds Provider:
- Views payment obligation on Web Portal
- Evaluates and values benefits
- Via Web Portal, offers to pay early existing payment obligation at a discount rate of 6.5%.
- Electronically pays Vendor $1MM minus a $16M discount fee or 1.6% of invoice
Buyer
- Receives goods and invoice
- Remits invoice approval and payment instructions through Web Portal
- 90 days hence, remits payment for $1MM through Web Portal (payment is cleared to Treasury
or Funds Provider who negotiated the obligation)
The Vendor’s hedging needs are eliminated through transparency of information. The availability of information
and technology facilitates efficient measurement and pricing of risk and comparison to capital costs. The
Vendor also achieves flexible, efficient, and off-balance sheet financing. All participants will benefit from
collaboration within the chain. All members benefit from pulling costs out of the chain versus
shifting within the chain as an eventual additional per unit cost.
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| Design Tools: |
Microsoft
Visio, UML, VSS, WSAD |
| Technologies: |
J2EE,
EJB, Servlet, JSP, XML, XSLT, JMS, JDBC, HTML, JavaScript, LDAP, SWIFT,
Applets, CSS |
| Middleware: |
MQSeries,
DB2 Connector |
| Application
Servers : |
WebSphere |
| Database: |
Oracle,
DB2 |
| Security: |
SiteMinder
Policy Server, Vasco Token |
| Third
Party : |
Adobe
PDF and FDF libraries |
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