AN INTRODUCTION TO BASWARE FINANCING SERVICES

Harold Bosse, Financing Services Marketing, Basware

HOW MUCH WORKING CAPITAL IS LOCKED IN THE SUPPLY CHAIN?

Every day of DPO extension yields £16 million in cash for the Fortune 500 buyer

25% of all bankruptcies are related to working capital shortages

Every day of DSO reduction yields £180 million in cash for a £65 million supplier

Early payment solutions can reduce DSO by 80% for suppliers

51% of CFO’s see working capital and liquidity management improvement as one

of their core responsibilities

Early payment terms can translate in a 36% return on capital for the buyer

THE ROAD TO FINANCIAL AGILITY STARTSWITH A SOLID PURCHASE-TO-PAY FOUNDATION

• Do you have visibility into spend and contractual obligations to quickly respond to business change?

• Are you already getting the best supplier discounts, or still suffering from chronic late payments and penalties?

• Do your financial systems support working capital optimisation and business growth?

THE FINANCIAL SUPPLY CHAIN

ACTUAL DELIVERY OF GOODS AND SERVICES

POs - Confirmations

DOCUMENTS RELATING TO THE ABOVE

FINANCING AND WORKING CAPITAL

FINANCIAL SUPPLY CHAIN

RFPs - Contracts ASNs - Invoices

PHYSICAL SUPPLY CHAIN

INFORMATION SUPPLY CHAIN

PAYMENT FRICTION IN THE SUPPLY CHAIN

Payment Friction

Both parties want to manage risk

Suppliers want to reduce DSO

Buyers want to extend DPO

Suppliers want to get their cash faster

Buyers want to hold onto their cash longer

PAYMENT FRICTION CALLS FOR ACTION

82%of buyers agree on-time payment

benefits

69%of buyers would put cash to work

23%of buyers

automate discount capture

WHAT IS WORKING CAPITAL OPTIMISATION?

Company value

Operating margin

Automated & fast discount capture

Direct impact on bottom line

Indirect tax compliance

Capital employed

Fixed assets

Working capital

Receivables Payables

Payment terms

Fast process supported by efficient technology

Error free bills

Optimisation: Discount vs Interest vs Cash

Payment terms

Fast process supported by efficient technology

Optimisation: Discount vs loan Interest vs CC

Matching

MORE CASH FOR GROWTH

*Source: Bavelos Group **Source: Creating Payment Energy 2014

Every day of DPO extension yields £16 million in cash for the Fortune 500 buyer*

Dynamic Discounting can work out to a 36% return on capital for the buyer

80% of suppliers would offer a discount in order to be paid early

THE JOURNEY TO FINANCIAL AGILITY

Working Capital Optimisation

B2B Networks

Purchase to Pay

Automated AP

Convergence of this area will fuel growth

Basware Commerce Network 1,000,000 buyers and sellers> 100 countries$750 Billion per year100 million transactions per year

Networked Purchase-to-Pay Basware Commerce Network Basware Financing Services

THREE CORE COMPONENTS TO FREE UP CASH

Financial

Activation

Automation

Financial value can only be generated when Automation and Activation have been successfully deployed

THE JOURNEY TO FINANCIAL AGILITY

3 WAYS TO IMPROVE WORKING CAPITAL

Collect your receivables

faster

1

Pay your supplier later

2

Pay your suppliers less

3

Process Ef-ficiency

80%

Working Cap-ital

20%

Focus

Process Ef-ficiency

20%

Working Capital80%

Value

Source: ”Creating Payment Energy” PWC

HOW STRATEGIC IS THIS WORKING CAPITAL OPTIMISATION?

BASWARE FINANCING SERVICES

Basware Commerce Network

B2B ePayments

Dynamic Discount

Multibank

Payment gateway

Supply Chain Finance

DPO DSO optimisation

Payment Funding

Timing Discount

FINANCIAL AGILITY POWERED BY THEWORLD’S LARGEST OPEN COMMERCE NETWORK

THE NETWORK ENABLES FLEXIBLE FINANCING

BUYERS

e-Invoices

SUPPLIERS

Payments

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THANK YOU