In today’s business environment, manufacturers are looking beyond traditional financing methods to meet their cash requirements.
An article from SearchManufacturingERP.com discusses how receivables auctions and Supply Chain Finance present viable options for manufacturers and suppliers looking to improve their cash flow. The article cites “cloud-based supply chain finance platforms” that provide financing on approved invoices. These invoices can be self-financed by the buyer, by the platform provider or by participating banks.
A Vermont-based glassware manufacturer turned to Ariba partner The Receivables Exchange (TRE) in place of bank receivables financing to get its cash faster. With TRE, the manufacturer was able to turn its receivables around from 55 days to an average of five to six days. In addition, with TRE, the manufacturer can request financing for specific invoices. According to the article, bank receivables financing would have required a year-long contract that would have tied up all the manufacturer’s receivables.
Other financing options cited in the article included Ariba Discount Professional, which facilitates early payment discount programs via the Ariba Network.