FTF Financial Group’s QuickPay Saves Steve and Selena!

by Apr 7, 2019Factoring, Supply Chain Finance

I’ve been blogging about Supply Chain Finance (SCF) and the importance of managing working capital efficiently. As you may already know, a Buyer may extend accounts payable payment terms, strengthen its supplier relationships and reduce its cost of capital. Suppliers, who utilize SCF, accelerate their cash flow early and improve their working capital as well. Both the Buyer and the Supplier may use their cash flow to grow, invest and increase operational efficiency.

As I have spread the SCF concept, I met Steve. Steve is a Buyer responsible for his company’s supply chain finance. He is under pressure to have as much working capital available so that production can use the funds to order more parts and the research department can use the funds for investment in their new innovative technology. To accommodate the cash flow need elsewhere, Steve the Buyer, is extending his accounts payable terms from 30 days to 60 days.

Unfortunately, now Burt has to listen to the accounts payable department’s complaints because they are inundated with calls from Selena, the Supplier.  Selena’s company sells a vital production part for Steve’s company’s product. Selena used all her company cash flow to produce the part and sell it to Steve’s company. Now her payroll is due. Selena is also receiving orders from other Buyers who need her product. She needs Steve to pay her invoices. What’s the problem? Selena provided the product on time and defect-free! She has now received a notice that Steve will not be paying in 30 days. Steve has notified her that new invoice terms are 60 days! What’s Selena going to do? She calls Steve’s accounts payable department!

Steve is in his office trying to find a solution. He sees a blog from FTF Financial Group covering Supply Chain Finance. After speaking with Melissa, Steve realizes this SCF program will help both his company and Selena manage their respective working capital efficiently and strengthen their relationship. Steve needs Selena because he buys one of the most important parts from her company for his production department.

Steve decides to implement FTF’s QuickPay program. Steve can now extend his invoice terms to 60 days and allow Selena to request her invoice payments early.  Steve and Selena are now excited about what they can do with their access to the cash flow without the burden and stress placed on the other party.

As Steve realized, FTF’s QuickPay program is a great solution to adopt supply chain finance unlocking the cash flow that is bottled up in the supply chain.