While some large companies do run their own ‘in-house’ supply chain financing programs, sometimes even in partnership with banks, there are many advantages of using an invoice discounting marketplace:
1. More efficient discovery of supplier needs: Every vendor has unique financing needs, highly variable over the financial year. CashFlo’s algorithm makes this discovery operable at great scale, and responds immediately to changing needs. CashFlo’s AI powered algorithm which looks at 500+ data points across three years of history is best suited for price discovery.
2. Far greater vendor coverage: Negotiating manually with all your suppliers is a herculean task. CashFlo’s self-service working capital platform with built-in price discovery removes this operational overhead and increases supplier participation.
3. Supplier Success: Suppliers often do not reveal their true need for working capital to their buyer, because they fear losing leverage in negotiations with the buyer. With CashFlo being the platform that they engage with on-demand for working capital, direct interactions with the buyer aren’t necessary, leading to a more transparent transaction behaviour.
This program can be used for all types of spends – direct or indirect, including marketing, logistics, admin, IT etc. The combined spend base yields a significant value from the program.
Vendors typically don’t want to reveal their financing needs to their customers.
A supply chain finance program goes beyond a mere financing program and offers additional benefits of balance sheet management (Receivables reduction) and mitigation against over-exposure to a single customer.
We have seen the largest of companies, with thousands of crores turnover, obtain working capital through invoice discounting. The rates may be lower in this case, but the size of the invoices more than compensates for this.
We recommend starting with a pilot program of 40-50 strategic vendors to ascertain needs and tailor the supply chain finance program accordingly.
Pricing pass back typically happens due to 3 reasons:
- A “one-size fits all” program that leaves a majority of vendors unsatisfied.
- Lack of flexibility with respect to timing of availing working capital
- Manual processes with drawn out rate negotiations between buyers and vendor.
CashFlo’s self-service, on-demand platform mitigates all these risks almost entirely, leading to little chance of pricing pass-back.
You can discount your invoices as soon as your buyer corporate makes them available on the CashFlo platform. You will need to register and complete some simple documentation to receive funds and you can then immediately discount invoices. If your buyer corporate is not on the CashFlo Platform, please write to us at email@example.com
Our unique competencies make us the best choice in the current market:
- Cashflo is currently the fastest growing platform in the market, and the largest Indian platform by market cap in its space.
- Only player to offer a true invoice discounting marketplace – allowing multi-funder, variable strategic goal systems for buyers, and anytime-anywhere working capital availability for suppliers.
- A rich supplier-side platform with world-class user experience, and a dedicated supplier success team, leading to industry-high supplier coverage in our supply chain finance programs.
- 100+ years of enterprise-scale execution experience and ability to go-live in 1 week
- A mature, public cloud platform implementation, with ISO27001 certification, offering scalabilty, customization and compliance without complex hardware and software deployment processes.
- A strong legacy in financial services of over 25 years; and has disbursed over $2 billion till date through partner financiers at a group level.
The benefits for suppliers are numerous:
- Accelerate your growth by strategically accessing capital when you need it, with no delay.
- Invoice discounting capital does not count as a borrowing on your balance sheet.
- Instant approval, disbursement within days.
- Collateral free, no credit check
- Available 24/7
The benefits for buyers are numerous and deploying a supply chain finance program through CashFlo far outweigh the benefits of operating such a program manually.
- More efficient discovery of supplier needs: Every vendor has unique financing needs, highly variable over the financial year. CashFlo’s algorithm makes this discovery operable at great scale, and responds immediately to changing needs. CashFlo’s AI powered algorithm which looks at 500+ data points across three years of history is best suited for price discovery.
- Far greater vendor coverage: Negotiating manually with all your suppliers is a herculean task. CashFlo’s self-service working capital platform with built-in price discovery removes this operational overhead and increases supplier participation.
- Supplier Success: Suppliers often do not reveal their true need for working capital to their buyer, because they fear losing leverage in negotiations with the buyer. With CashFlo being the platform that they engage with on-demand for working capital, direct interactions with the buyer aren’t necessary, leading to a more transparent transaction behaviour.
The benefits of funding supply chain finance programs include the following:
- Supply chain finance platform runs on highly-secured systems and is tested and approved by over 60 funding sources, including some of the largest global banks
- CashFlo is compliant with global standards for information security, including ISO27001
- CashFlo offers a fast go-to-market strategy for banks, as you can rapidly deploy funds to a number of active supply chain finance programs immediately. Our rapid go-live program allows you to partner with a new buyer and go live in last than 4 weeks.
- Allowing banks to market supply chain finance independently based on Cashflo’s platform.
- Full assistance and support to manage financing programs
Through CashFlo, you have access to over 20 financiers, including the largest public and private sector banks in India and major NBFCs. We offer financing through even more entities through our partnerships with TREDS platforms.
CashFlo is part of the HCS Group – a diversified financial services company with 20+ years of cross-industry experience in financial services. hcs Group has over Rs. 15,000 Cr of debt capital raised across sectors, a deep understanding of the Working Capital & SME market and is a Registered (non-deposit taking) NBFC.
Companies can choose to deploy their own treasury capital, as it is the cheapest source of funding for the buyer. Alternatively, they can choose to leverage CashFlo’s partner banks, NBFCs, and other Institutional investors to fund early payment of their vendors invoices and pay the partner bank at a later stage. A Buyer Corporate can choose to use both options of own treasury + external funding as well through the platform’s Hybrid solution.
Cost of capital will be cheapest for a treasury funded program and so returns will be higher. Scaling up of the program is much faster and all vendors can be covered under the program as there is no bank documentation needed from the vendors.
A bank funded program offers significant agility to your supply chain program, allowing you to vary the funding mix according to your strategic goals.
No. We never sell your data to third parties.
Your data will be only shared as needed with other parties involved in your supply chain – buyers, suppliers and financiers. Supplier invoice discounting transactions are shared only at an aggregate, anonymized level.
The entire program will be run by CashFlo as a managed service for you. Only involvement needed from the procurement team will be to share vendor details and to send an introduction mail to vendors about the program.
CashFlo can integrate with any of the buyer’s ERP. Leading ERPs that CashFlo works with are SAP and Oracle.
ERP Integration can be achieved in as little as 3 weeks and usually 1.5 months is sufficient. Cashflo however has the fastest time to market – it can go-live in as little as 1 week from signing using manual integration, while IT integration can be carried out in parallel.
CashFlo’s security practices are one of the best in the industry:
- Cashflo offers bank-grade 256-bit encryption for all the data on its platform – both on-database and in transit.
- CashFlo’s data security practices have been certified by the same organization that certified India’s UPI infrastructure.
- Vulnerability and Penetration Testing (VAPT) has been extensively carried out. We undertake periodic security third-party audits according to global best practices.
- CashFlo’s data security practices are ISO 27001 certified.
- Buyers data is logically separated from other corporates data and no other corporate has access to a particular buying corporates data.
- Data is stored locally within India according to RBI’s norms.
- Cashflo uses Microsoft Azure – The most secure cloud platform that offer’s Microsoft’s Enterprise Grade security, given its decades of experience in serving enterprise customers.
Invoice discounting is the practice of using a company’s unpaid invoices to raise working capital & fulfil its financial needs. It is a win-win transaction for all parties involved. Suppliers obtain working capital, as and when needed, without having to go through a long approval process with a financier. In addition, since it is leveraged against the buyer’s credit worthiness, there is no credit check required for the supplier.
Buyers gain vast strategic benefits by strengthening their supply chain, and improving the financial resilience of key suppliers. At the same time, obtain direct bottom-line growth by deploying their own funds as supplier working capital.
Cashflo provides a unique invoice discounting marketplace for buyers and suppliers to collaborate in a win-win fashion.
Buyers need to set up their supply chain with us – list their suppliers and approved invoices; and make capital available – either their own internal funds or external funds from Banks, NBFCs or other institutional investors.
Suppliers can then register on CashFlo, view the approved invoices with their buyer and obtain working capital against these invoices on- demand, collateral-free.
A letter of credit, or “credit letter” is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility.
Invoice discounting converts assets on the company balance sheet into working capital, whereas Business loans are adding liabilities/debts to the balance sheet of the Company. Upon successful on-boarding processing, Invoice discounting usually is able to advance cash to the supplier within a few days of discounting the invoice. Business Loan usually takes a longer time before cash can be advanced to the company.
Unlike bank loans, Invoice discounting does not require individual legal documentation or covenants for each cash advance. The legal paperwork is completed up front during the onboarding process and allows suppliers to discount invoices as and when they need to.
Business loans are usually secured against corporate assets and often by personal assets as well. Invoice discounted working capital is secured against the invoice itself.
Invoice discounting working capital is an on-demand, collateral free facility that can provide capital as and when needed. Other forms of borrowing are typically one-time transactions.
Invoice financing is a perfect facility to solve business cash flow challenges. It helps businesses to improve their accounts receivables, turning outstanding invoices into immediate working capital to help the business organically grow.