Combining Dynamic Discounting and Supply Chain Finance

Solutions that benefit your entire financial supply chain. Supply chain finance and dynamic discounting have experienced tremendous growth over the past decade. However, until now, these solutions have rarely been implemented simultaneously.

Historically, supply chain finance and and dynamic discounting have taken two very different approaches to improve cash flow. Supply chain finance helps the buyer improve working capital and strengthen the balance sheet by optimizing supplier payment terms while using third party financing from financial institutions to offer early payment. Dynamic discounting, on the other hand, is a solution that helps companies generate additional returns by capturing cash discounts from suppliers. Given their distinct differences, these solutions have been traditionally offered by separate platform providers: one focusing on dynamic discounting and the other focusing on supply chain finance.

But that’s changing. In recent years, financing the entire supply chain has become a strategic initiative for leading organizations. As a result, the corporate focus has changed and there is an increased appetite to implement these solutions in tandem. There are several reasons causing this market shift:

• • Buying organizations see an opportunity to use supply chain finance to generate cash flow, which can then be put to work in a self-funded dynamic discounting arrangement. This combination allows companies to generate more cash discounts without negatively affecting their balance sheet.

• • The use of cash can change over time. An increasing number of companies are looking for flexible solutions that allow them to toggle between self-funding and third party funding depending on their focus and needs.

• • Programs that combine both solutions are more resilient as interest rates change over time.

Historically, a company had to use two different platform providers to implement both solutions, each with different sets of legal agreements and ERP integrations – but not anymore. PrimeRevenue is the only provider to offer a common platform for both supply chain finance and dynamic discounting,  allowing companies to choose between self-funding or third party funding using the same interface, support, legal documentation and program rollout. Contact us to learn more about our integrated solution.