The supply chain is a complex network of suppliers, manufacturers, distributors, and retailers that work together to get products into the hands of consumers. Managing this supply chain effectively is essential for businesses of all sizes. Traditionally, supply chain management has been a manual process, with businesses relying on paper documents and phone calls to keep track of orders and inventory levels. However, the advent of new technologies has led to a revolution in supply chain management. Digitization has allowed businesses to track orders and inventory levels in real time, plan production more efficiently, and even ship products directly to consumers. As a result, supply chain management has become increasingly important for businesses that want to stay competitive. In addition, the rise of supply chain finance has made it easier for businesses to access the capital they need to invest in new technologies and expand their operations. How is U.S. Bank adjusting in the current climate?
This posting is in Yahoo! Finance and discusses a collaboration agreement between U.S. Bank and LiquidX, the New York City-based fintech that provides a trade finance transaction marketplace for multiple industry participants, including FIs and various corporate verticals. We have been covering this space for many years through member research, and as many readers will know through these pages the pandemic has highlighted the value of effective working capital management, especially amongst SMEs.
‘This collaboration – which comes at a time of unparalleled stress in the global supply chain – will pair the bank’s strong balance sheet with LiquidX’s streamlined platform technology to help address supply-chain-finance friction and cash-flow challenges facing many companies. Suppliers and buyers will be able to connect their supply-chain systems directly to U.S. Bank and transact through LiquidX’s easy-to-use platform. U.S. Bank financing solutions delivered through this collaboration will enable suppliers to be paid nearly immediately and buyers to receive extended payment terms…
“With so many supply-chain challenges for businesses, we want to help make the financing process as smooth as possible,” said Dan Son, who oversees global trade and supply-chain finance at U.S. Bank. “This new collaboration will deliver a single intuitive interface that seamlessly connects suppliers, buyers and our bank in the supply-chain ecosystem. As one of the most trusted banks in the U.S., with some of the highest debt ratings, we can unlock valuable working capital for our clients.”’
As we have been advising for years, the digitization of cash cycle systems and processes creates a window into the world of latest generation technology that can greatly improve banks’ client options for managing their cash flow needs. This runs across procurement, payables, receivables and trade financing, among other things. So this move by U.S. Bank is in line with the further access to digital options for their corporate clients in a time of uncertainty, which is a good thing.
‘The collaboration between U.S. Bank and LiquidX enhances existing supply-chain-finance solutions currently available to U.S. Bank clients. The Receivables Purchase Program allows sellers to convert credit sales to immediate cash flows and reduce days sales outstanding while extending payment terms for buyers. The Approved Payables Financing Program helps buyers pay suppliers early, reduces payment-processing costs, and gives suppliers faster and more predictable access to cash…
As supply-chain decisions become strategically critical for businesses, Son said, innovative supply-chain-finance solutions provide opportunities to strengthen vendor and client relationships, reduce costs, and diversify sources of working-capital funding. In addition, supply-chain-finance solutions can advance other important company priorities, such as Environmental, Social and Governance (ESG) initiatives by providing financial incentives and greater access to working capital for diverse suppliers.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group