Technology to disrupt the traditional SCF

The benefits of a Supply Chain Finance programme for both buyers and suppliers are well documented (here’s a decent overview) but in this article I wanted to focus less on the ‘theory’ behind SCF, which remains robust, and focus more on the execution of SCF programmes, which has been transformed by Fintech.

Since it’s inception, the ‘open secret’ within the Traditional SCF industry (a space dominated by Banks and legacy platforms) was the inherent number of challenges faced by traditional providers which significantly restrict the scope, scale & success of SCF programmes. What those challenges are & why many businesses are embracing next generation SCF programmes is the focus of this article.

Here we highlight 6 areas where DrGrep is poised to revolutionise what is possible in Supplier Finance vs the traditional approach:

1. Making finance available to ALL of your suppliers, not just the large ones.

Traditional approach:Traditional solutions can focus only on a handful of your largest suppliers (typically referred to as the ‘Short Tail’), due to the inherent operational restrictions & bureaucracy. This significantly reduces programme scope, leaving many thousands of your suppliers without access to SCF & also a considerable majority of your spend.

DrGrep approach: Why limit your Supplier Finance programme based on the operational restrictions & motivations of your solution provider? By leveraging agile Technology, you can make Supply Chain Finance available to 100% of your spend across 100% of your suppliers, by removing the considerable friction imbedded in the traditional approach.

2. Solving the challenge of endless Supplier On-boarding

Traditional Approach: Paperwork + Bureaucracy + Manual Processes + People. A Traditional SCF on-boarding experience requires a lot of effort for all parties. Suppliers can take between a few weeks to a few months to join a programme, impacting relationships & limiting programme scope. The buyer, the bank & the supplier is heavily involved with the processes from start to finish, requiring significant investments in resource, processes & time.

DrGrep Approach: Paperless + Automation + Supplier Support + Free (open) Supplier network + Inexpensive Business Applications = A next generation on-boarding experience that takes the supplier less than 5 minutes to fully onboard, opening up your programme to your entire Supply Chain.

DrGrep is also working right now to take the burden off the buyers when it comes to supplier outreach & education. Quite a lot of resources are being designed, and technology are being deployed to make sure suppliers get the maximum information to join the program as smoothly as possible. This gives suppliers the autonomy of self-service, putting them in control & giving you the ultimate peace of mind that you can exceed your corporate objectives & partner with your suppliers, without the traditional effort.

3. Delivering Fully Automated, Integrated & Scalable Programmes

Traditional Approach: After you’ve been through the process to onboard a supplier, you now enter into the day/day programme administration. You will need to securely send the approved invoices (typically in a proprietary format) and once they’re paid, reconcile a file back (in that proprietary format) so you can update your ERP system manually. You’ll need additional processes, operating controls, IT build & headcount for programme management to help reduce the risk of errors & double payment. Unfortunately, the same workload and effort is typically required of your suppliers as well. This level of friction acts as an enormous barrier to the scale and success of your programme.

DrGrep Approach: You run your business from your ERP, so why not let your ERP run your programme? Thats why DrGrep is in the process of integrating the network with major ERP solutions of the time. Once that happens, Invoices will be made available for early payment as soon as they’re approved — giving you the largest possible window of opportunity. Once a supplier elects for an early payment, your ERP system will automatically be updated & reconciled. This delivers the automation & integration necessary for scale and frees up both your time and your suppliers time to focus on running your businesses.

4. Maximise your funding window, maximise your opportunity.

Traditional Approach: Suppliers send you the Invoices for approval and often times terms and conditions for early payment discounts. But how long it takes you to approve them is down to you. As a result anxious suppliers wait forever for money, their business suffers, and you loose early payment discount opportunity. All suffers in the end.

DrGrep Approach: For a truly optimised programme, you need to be able to offer your suppliers the largest possible window to accelerate payments & that means getting your invoices approved as quickly as possible. DrGrep’s suite of Accounts Payable automation tools allow you to leverage best in class electronic invoicing & integration to enable fast, automated invoice approval, driving operational efficiency — giving your suppliers the largest possible discount window. The bigger the window, bigger the opportunity.

5. Leveraging Data To Drive Performance

Traditional Approach: How is your programme performing? I’ll send you a spreadsheet in a few weeks…but I can tell you it’s doing great.

DrGrep Approach: Without data, it’s just another opinion. The ability to access real time performance metrics, run bespoke reports, track KPI’s & benchmark against other best-in-class programmes are fundamental to modern programmes success. Having that data at your fingertips & giving you full access to a team who can help drive best practise is just part of the service.

6. Leveraging Digital Technology To The Maximum

Traditional Approach: Can you approve my Invoice? I am not in charge, let’s ask supervisor. Ahh looks like your invoice has a problem in one line item. If you send a fresh one we will process it further.

DrGrep Approach: We are available both on Web and Mobile platform. For large amount operation use WebApp, and for quick 24/7 operation use MobileApp. Now you are on top of all the documents. Suppliers can now quickly correct anything you ask them to and resend it to you in seconds now. No more calling, emailing and loosing days on Approval process.

If you’re interested in understanding how DrGrep can help solve the challenges in your Traditional Supplier Finance programme or if you’d like to start afresh, we’d love to talk. Check our portal www.drgrep.com. you can directly talk to our customer angels there.