Reverse Factoring Fundamentals: What it Is, What it’s Not and How it Works

By PrimeRevenue • Published August 15, 2019 • 3 minute read

The supply chain ecosystem is a complex one – especially for multinational companies that work with suppliers all over the world. The health of a global supply chain isn’t just measured by revenue and profit. A more relevant indicator is how efficiently capital flows between buyers and suppliers. Slow moving capital, much like slow moving inventory, creates unnecessary costs and inefficiencies in a supply chain.

Working capital is critical to every business, but its importance is underscored in an environment that is inherently more susceptible to global and regional economic shifts, industry volatility, geopolitical changes, manmade and natural disasters and many other factors. To be considered high performing, global supply chains must be agile, innovative and competitive despite these variables – and all that’s fueled by working capital. Given these factors, it’s no surprise that finance and procurement professionals are seeking ways to more easily access working capital that is trapped in their supply chains.

Enter reverse factoring. In this white paper, we cover the fundamentals, including:

  • What is reverse factoring? What is it not? How does it work?
  • What are the benefits?
  • What are common misperceptions surrounding reverse factoring?
  • Following supplier onboarding, how are receivables submitted and processed?
  • And more…

Reverse Factoring Fundamentals: What it Is, What it’s Not and How it Works