Invoice discounting gaining ground in corporate treasury

Source: C2FO

The majority (71%) of corporate treasurers believe invoice discounting can act as a means for the Treasury to provide tangible value add, according to research from C2FO, the world’s market for working capital.

The Supplier Finance Survey, which polled leading UK corporate treasurers in Q4 2015, shows that most treasury functions are looking into the value of accelerating payment to suppliers.

Principle findings from the Supplier Finance Survey include:

  • 96% of corporate treasurers agree that the role of supplier finance is growing
  • 67% of treasurers believe their supply chain is currently suffering cash and liquidity challenges

Innovative technology is supporting the role of the treasury function, with invoice discounting clearly enhancing the treasury’s added value to the rest of the organisation. One branch of this, “dynamic discounting”, allows treasurers to simultaneously generate a better return on their cash whilst support their supply chain.

"Corporate Treasurers frequently don’t have the ability to enhance both the P&L and the Balance Sheet - digital platforms do just that and are an extremely powerful tool for any Treasurer’s toolkit,” said Jason Bristow, former Vice President and Treasurer at Amazon.com, now CFO of Code 42 Software, Inc. “Having the ability to deploy cash based on business cycles and seasonality proved to be extremely valuable - the C2FO model allows for both suppliers and corporates to be extremely flexible in their approach."

Colin Sharp, SVP EMEA at C2FO said, “Given the increasing pressure on treasurers’ to manage working capital and to generate a better return on cash, we have seen tremendous growth and we expect to see more big buyers implementing invoice discounting programmes in 2016.

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