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AN INTRODUCTION TO BASWARE FINANCING SERVICES
Harold Bosse, Financing Services Marketing, Basware
HOW MUCH WORKING CAPITAL IS LOCKED IN THE SUPPLY CHAIN?
Every day of DPO extension yields £16 million in cash for the Fortune 500 buyer
25% of all bankruptcies are related to working capital shortages
Every day of DSO reduction yields £180 million in cash for a £65 million supplier
Early payment solutions can reduce DSO by 80% for suppliers
51% of CFO’s see working capital and liquidity management improvement as one
of their core responsibilities
Early payment terms can translate in a 36% return on capital for the buyer
THE ROAD TO FINANCIAL AGILITY STARTSWITH A SOLID PURCHASE-TO-PAY FOUNDATION
• Do you have visibility into spend and contractual obligations to quickly respond to business change?
• Are you already getting the best supplier discounts, or still suffering from chronic late payments and penalties?
• Do your financial systems support working capital optimisation and business growth?
THE FINANCIAL SUPPLY CHAIN
ACTUAL DELIVERY OF GOODS AND SERVICES
POs - Confirmations
DOCUMENTS RELATING TO THE ABOVE
FINANCING AND WORKING CAPITAL
FINANCIAL SUPPLY CHAIN
RFPs - Contracts ASNs - Invoices
PHYSICAL SUPPLY CHAIN
INFORMATION SUPPLY CHAIN
PAYMENT FRICTION IN THE SUPPLY CHAIN
Payment Friction
Both parties want to manage risk
Suppliers want to reduce DSO
Buyers want to extend DPO
Suppliers want to get their cash faster
Buyers want to hold onto their cash longer
PAYMENT FRICTION CALLS FOR ACTION
82%of buyers agree on-time payment
benefits
69%of buyers would put cash to work
23%of buyers
automate discount capture
WHAT IS WORKING CAPITAL OPTIMISATION?
Company value
Operating margin
Automated & fast discount capture
Direct impact on bottom line
Indirect tax compliance
Capital employed
Fixed assets
Working capital
Receivables Payables
Payment terms
Fast process supported by efficient technology
Error free bills
Optimisation: Discount vs Interest vs Cash
Payment terms
Fast process supported by efficient technology
Optimisation: Discount vs loan Interest vs CC
Matching
MORE CASH FOR GROWTH
*Source: Bavelos Group **Source: Creating Payment Energy 2014
Every day of DPO extension yields £16 million in cash for the Fortune 500 buyer*
Dynamic Discounting can work out to a 36% return on capital for the buyer
80% of suppliers would offer a discount in order to be paid early
THE JOURNEY TO FINANCIAL AGILITY
Working Capital Optimisation
B2B Networks
Purchase to Pay
Automated AP
Convergence of this area will fuel growth
Basware Commerce Network 1,000,000 buyers and sellers> 100 countries$750 Billion per year100 million transactions per year
Networked Purchase-to-Pay Basware Commerce Network Basware Financing Services
THREE CORE COMPONENTS TO FREE UP CASH
Financial
Activation
Automation
Financial value can only be generated when Automation and Activation have been successfully deployed
THE JOURNEY TO FINANCIAL AGILITY
3 WAYS TO IMPROVE WORKING CAPITAL
Collect your receivables
faster
1
Pay your supplier later
2
Pay your suppliers less
3
Process Ef-ficiency
80%
Working Cap-ital
20%
Focus
Process Ef-ficiency
20%
Working Capital80%
Value
Source: ”Creating Payment Energy” PWC
HOW STRATEGIC IS THIS WORKING CAPITAL OPTIMISATION?
BASWARE FINANCING SERVICES
Basware Commerce Network
B2B ePayments
Dynamic Discount
Multibank
Payment gateway
Supply Chain Finance
DPO DSO optimisation
Payment Funding
Timing Discount
FINANCIAL AGILITY POWERED BY THEWORLD’S LARGEST OPEN COMMERCE NETWORK
THE NETWORK ENABLES FLEXIBLE FINANCING
BUYERS
e-Invoices
SUPPLIERS
Payments
www.basware.comwww.twitter.com/baswarewww.facebook.com/BaswareCorporationwww.linkedin.com/company/basware
THANK YOU
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