What is supply chain finance?

Supply chain finance is the collective term for a group of financial solutions aimed at optimizing cash flow and working capital for all parties involved in a supply chain. Its various products and techniques are designed to enhance the efficiency and effectiveness of financial transactions between buyers, suppliers, and financial institutions.

What is payables finance?

Payables finance is where a corporate (buyer) commits to paying their invoices (or approved invoices) at maturity, allowing a funder to offer the supplier an early payment in exchange for a discount based on the buyer’s credit risk.

What is trade finance?

Trade finance involves providing finance, risk mitigation, and payment solutions to buyers, sellers, and other participants in global trade. The objective is to minimize the risks associated with cross-border transactions and ensure the smooth flow of goods and services between buyers and sellers.

What is trade receivables finance?

Trade receivables finance is a type of supply chain finance where businesses can obtain funding for invoices owed to them before the payment date. A receivable purchase agreement is signed between a company and either a bank or finance provider, enabling financing based on account receivables.

What is trade receivables securitization?

Trade receivables securitization allows large corporates to sell pools of their outstanding invoices on capital markets, creating a new funding source. A special purpose vehicle (SPV) pools the invoices and issues securities to investors, generating funds for receivables purchases.

What is the difference between factoring and securitization?

Factoring allows companies to sell their receivables directly to a funder in exchange for finance, whereas securitization involves selling a pool of receivables through an SPV, which issues securities to investors. Factoring is a direct transaction, while securitization requires a large receivables portfolio and transfers risk to the SPV.

What is distributor finance?

Distributor finance provides funding to distributors to help finance their inventory and receivables, improving cash flow and working capital. Manufacturers can also request early payment from funders for invoices, receiving the full invoice amount upfront.

What is dynamic discounting?

Dynamic discounting allows buyers to use excess cash to pay invoices early. Buyers and suppliers negotiate payment terms that accelerate payments in return for a discount, benefiting both parties by optimizing cash flow and providing suppliers with an alternative funding source.

What is working capital management?

Working capital management is the process of managing a company’s short-term assets and liabilities to ensure financial stability and operational efficiency. It involves overseeing cash, inventory, accounts receivable, and accounts payable to balance liquidity and profitability.

SUPPLY CHAIN FINANCE

Overview

Specs

Supply Chain Finance

A platform to simplify the delivery of payables and receivables finance programs

Simplify | Automate | Scale

Supply chain finance solutions tailored to suit your business

Managing working capital programs involves processing vast amounts of data, but outdated technology and manual processes have made the effort slow and inefficient. The FIS® Supply Chain Finance (formerly Demica) platform helps reduce complexity and increase flexibility for banks and corporations, as its technology enables them to deliver and access the full spectrum of supply chain finance solutions.

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Banks

Simplifying supply chain finance with the right technology

Operational barriers make it difficult for banks and financial institutions to deploy the full range of supply chain finance solutions. Available on either a white-label or transactional basis, our platform helps transform customer experiences and fuel growth with simple deal configurations, an intuitive interface and real-time portfolio monitoring to ensure your customers have money when they need it.

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Corporates

Connecting corporates to the liquidity they need to grow

Rising funding costs make it hard to access cost-effective financing, and with high days sales outstanding, liquidity remains trapped in your trade receivables. Our technology accelerates your funds in motion by connecting you with a network of over 250 banks and nonbank financial institutions to develop a supply chain finance solution to help improve your working capital and accelerate the cash conversion cycle.

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Private equity sponsors

Adding value to your investments

We work with private equity sponsors to create working capital solutions for their portfolio companies, funding them through our network of global banks and nonbank financial institutions.

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Supply Chain Finance

Configurable for any working capital structure

The FIS Supply Chain Finance Platform enables you to set up, implement and manage the full range of working capital solutions in a single place. Leverage the platform to structure trade receivables solutions, customize supplier onboarding in payables finance programs and automate reporting in complex securitizations – all while being guided and supported by our expert advisory teams.

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Meet the businesses we serve

Insights

Transform data into strategic value

By consolidating data from various systems, it’s possible to gain reliable, real-time insights that help corporates and funders optimize their funds effectively.

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Bridging risk and financial management

Meeting funder expectations for risk management requires detailed reporting, transparency and integration, making them crucial for banks offering structured solutions. Read article

Leverage expertise, ensure compliance

Partnering with third-party technology providers, banks can use their expertise to offer superior products while maintaining security and compliance standards. Read article

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Learn more about how FIS empowers banks and corporates in simplifying, automating and scaling their working capital solutions.

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View detailed specifications for Supply Chain Finance.

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Specs

Supply Chain Finance

Simplified transaction management and reporting powered by a dynamic platform

Expert delivery from initial program setup to platform integration and deal implementation

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One powerful platform, multiple products

With our web-based platform, teams can collaborate on transactions with user-friendly structuring tools for managing payables and receivables while our onboarding tool connects sellers, buyers and banks directly to the platform. Granular reporting provides real-time insights into receivables performance, whether you choose the FIS®-branded platform or a while-labeled version.

Resources

Receivables Finance product sheet

A cloud-native solution designed to help businesses unlock cash trapped in outstanding payments and reduce the cost of funds.

Trade Receivables Securitization product sheet

A solution to tap into capital markets to sell a diversified pool of your company’s receivables, release capital and improve financial metrics.

FAQ

What is receivables finance, and how does it support cash flow?

Receivables finance is a way for companies to access cash tied up in outstanding invoices by selling them to a third party at a discount. This improves cash flow, reduces days sales outstanding and helps fund operations without taking on new debt.

How can working capital programs help reduce financing costs?

Working capital programs provide early payment options that are often more cost-effective than traditional borrowing. By accelerating cash inflow from customers, businesses can reduce their need for expensive short-term credit facilities.

What are the benefits of using third-party funders for supply chain finance?

Third-party funders offer flexible access to liquidity without putting pressure on existing bank lines. This allows companies to diversify funding sources, improve resilience and support growth without increasing balance sheet liabilities.