Treasurers ‘see invoice discounting as adding value’

CollateralManagement

More than seven in 10 corporate treasurers believe invoice discounting offers a means for treasury to add tangible value to their organisation according to research from C2FO.

The UK-based working capital exchange C2FO conducted its research among those attending the Cash and Liquidity Optimisation Europe conference for corporate treasurers and finance directors, held in London in early-November 2015.

The Supplier Finance Survey indicated that most treasury functions are looking into the value of accelerating payment to suppliers. As well as the 71% who agreed that invoice discounting was beneficial, 96% of corporate treasurers agreed that the role of supplier finance is growing while 67% believed their supply chain was suffering cash and liquidity challenges

Innovative technology supports the role of the treasury function, with invoice discounting clearly enhancing the treasury’s added value to the rest of the organisation, reports C2FO. One branch of this, “dynamic discounting”, allows treasurers to simultaneously generate a better return on their cash while supporting their supply chain.

“Corporate treasurers frequently don’t have the ability to enhance both the P&L and the balance sheet – digital platforms do just that and are an extremely powerful tool for any treasurer’s toolkit,” said Jason Bristow, former vice president and treasurer at Amazon.com, now chief financial officer (CFO) of Code 42 Software.

“Having the ability to deploy cash based on business cycles and seasonality proved to be extremely valuable – the C2FO model allows for both suppliers and corporates to be extremely flexible in their approach.”

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