Demica || Supply Chain Finance Solutions

Supply Chain Finance Solutions

There is a growing corporate demand for financially efficient supply chains, with companies and their suppliers under conflicting pressures to improve payment terms, reduce prices and improve cash flow efficiencies. Supply chain finance solutions aim to improve the financial efficiency of the supply chain, resulting in both suppliers and buyers enjoying a substantial reduction in working capital.

Demica’s expertise in invoice-based finance structures and working capital solutions enables our clients to implement optimal supply chain finance solutions based on the real-time reporting of asset data. Demica's web-based platform, Citadel SCF streamlines the execution of a supply chain finance solution through the complete automation of the financing process, bringing cashflow benefits to both buyers and suppliers, and a simple, automated transaction management solution for financiers.

Our Citadel platform processes over €10.5 billion of invoice-based transactions for major corporates and institutions.

The Supply Chain Finance Structure

The process begins with the supplier sending an invoice to the buyer. The buyer approves the invoice and uploads it to the Supply Chain Finance (SCF) platform, thereby creating an irrevocable payment obligation. The supplier is now able to sell the invoice to the financier at an attractive rate, based on the buyer risk. The transaction is designed to be a “true sale” where the risk is transferred from the supplier to the financier. For example, in a supply chain with 75-day terms, it is possible for the supplier to receive payment on day 5, at a low SCF cost, while the buyer is able to pay the financier on day 75.

The success of a Supply Chain Finance solution hinges on the real-time visibility and integrity of invoice data, to enable all participants in the structure to track invoices, advance payments and settlements. If the process were not automated, the key efficiencies of lending against eligible invoices would be lost in the costs of manual processing.

Implementation of a Supply Chain Finance Solution

We work with our clients from the initial phase of a supply chain financing solution to ensure a successful ongoing programme.

Phase One – Feasibility

Analyse the payables history of the buyer and their trading terms with individual suppliers

Deliver an indication of the potential improvements and efficiencies in costs, payment terms and cash flow

Phase Two – Implementation

Design the optimum structure for the supply chain financing programme

Work with suppliers to offer advice and training

Test all aspects of the platform’s performance rigorously prior to launch

Phase Three – Processing

Launch the programme

Support the buyer and suppliers

Add new suppliers and ensure their smooth integration into the ongoing programme

Demica's Citadel® Platform

Click here for more information on Demica's Citadel SCF solution

Request further information on how your organisation could benefit from working with Demica

Citadel® is a registered trademark of Demica Limited