All the Essential Results in in Reverse Factoring

According to the survey, the key success factor is the choice of a partner bank. It is important to pay attention to the territory covered by the bank, its competence in legal aspects, its financial capabilities and potential.

The Second Thing

The second most important factor is internal support. According to the research, the implementation of new projects is almost twice as successful if it is under the control of the CEO (chief executive officer) of the company, rather than the CFO (chief financial officer). Of course, the finance department should be directly involved in supporting innovation, but the whole process of implementing new ideas must be under the personal control of top management, since it is these people that have an impact on stakeholders, especially suppliers. Great options for the proper reverse factoring now for you now.

The Third Key Factor for You

The third key factor affecting success is the supplier’s interest. The authors emphasize that suppliers can be rather difficult to persuade to take part in programs built on the principle of reverse factoring. Many suppliers simply do not understand this system and prefer not to communicate with things they do not understand. Leaders should be careful about which suppliers to include in the first wave, and which ones to enter into the program after running-in.

All Perfection for Loan

Contrary to the expectations of the authors, the study showed that the composition of the project team for the introduction of a supply chain financing system and the number of departments involved are not of particular importance in the implementation process. The most successful implementation programs include either five departments (financial, procurement department, logistics department, IT department and legal department) or two departments (finance department and supply department).

A proper understanding and observance of these conditions is a rather complicated task and takes a lot of time. This is one of the reasons why companies are slowly adopting the described tool. However, the authors of the article note, the possibility of solving the urgent task of reducing working capital makes the game worth the candle.

Do you want to attract new suppliers or get a guarantee of uninterrupted supplies? Reverse factoring is a find for a buyer who needs funds to pay debts to suppliers.

Benefits

Reverse factoring – today one of the actual and meeting the requirements of modern consumer factoring products.

The package of services for the supplier and buyer includes:

  • financing of the supplier, closing of cash gaps, liquidity risk insurance;
  • obtaining a “leverage” in the form of a guaranteed deferral of payment without providing collateral;
  • granting of commercial credit in the form of additional delay;
  • money requirements management services;
  • Credit risk insurance for factoring without recourse.

It is advisable for the buyer of goods and services to use reverse factoring in cases when:

The buyer needs a deferred payment (commercial loan). It is in this situation that the factoring company is ready to finance the supplier of goods / services, closing its cash gaps arising in the process of granting a deferred payment to the buyer.

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