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Initiative for standardising ‘track-and-trace’ of invoices and ‘one-click-finance’ requests
Exchanging invoice payable statuses for better financing of SMEs
3 December 2015
2 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Unleashing invoice statuses creates value for the whole ecosystem
• The invoice status “sits” in your customers administration – waiting for approval and to be paid
• Help ‘Unleash the status' of outbound invoices back to the original sender (i.e. supplier)
• Supplier’s software has to be able to ask for the invoice status and receive it back from his buyer
• The invoice status is little information - but a great opportunity for ERP software providers to help their clients with faster and better invoice financing
RECEIVED VIEWED PENDING APPROVED VERIFIED GUARANTEED PAYMENT
3 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
How can we realise this?
• Create an exchange standard for invoice status information • We need an international coalition of actors in the financing
chain for this: ERP providers, banks and other financiers, e-invoicing providers
• Implement standards in ERP software API to create optimal user experience (i.e. ‘one click finance’)
• Develop and embed propositions in the growing ecosystem of e-invoicing providers, financiers and banks
EU wide standardisation
4 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
When and how can you participate?
| January ‘16 February March
Free Webinar Date: 10th of DecemberTime: 15:00 – 16:00 CET
Click here to register
WorkshopDate: 15th of JanuaryTime: MorningLocation: Frankfurt
Start of Coalition in Q1 2016!
Pepijn Groen
+31 6 24 89 72 99
Chantal van der Velde
+31 6 42 36 80 66
December ‘15
Read more information about our initiative below!
5 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
BACKGROUND INFORMATION
6 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Accounting software providers are able to reinforce SMEs working capital and utilise finance by unlocking invoice status information and provide for real-time financing!
Current invoicing situation:• Exchange of today’s EU invoice value (i.e. B2B and
B2G) is approximately €17.500.000.000• Suppliers suffer from Buyer’s payment behavior,
ranging from 30 - 120 days • Only ±38% of outbound invoices are paid by the Buyer
on due date, resulting in limited visibility for Suppliers on the invoice status and their working capital
Drivers for unlocking financing potential:• SMEs access to financing instruments is on top of the
EU political agenda• Financial data (e.g. invoice status, risk information,
transactional history) “sits” in administrations and is ready to be used
• Suppliers are not yet facilitated directly from their software in financing
Asset-based lending• Supplier propositions (e.g.
Factoring, ABF, Dynamic discounting, invoice financing)
• Onboarding of mid-tier suppliers which represent ±25% of annual spend of invoice value
• Only available for SME’s with >€2 mln turnover, due to high associated costs (e.g. risk analysis, compliance)
Reverse factoring• Buyer driven• At invitation of large buyers,
onboarding of high spend strategic suppliers, that represent ±75% of annual spend of invoice value
Invoice financing • Supplier driven (e.g. invoice
financing via contract or per invoice)
• Onboarding small business suppliers representing limited annual spend of invoice value
• Available for long-tail suppliers, depending on their risk exposure and with minimum invoice value (e.g. €1000)
Reverse Factoring Asset Based Financing Invoice Financing
Source: Billentis E-Invoicing/E-Billing and Cribis, Payment Study 2014
SME’s access to financing instruments is far from optimised: great financial potential hidden in invoices
7 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Status information already exists in e-commerce, so why not apply it to invoicing?
2
1Accepted for shipment Driver on his way Delivery
Received invoice Processing invoice Will pay invoice
E-Commerce
Invoicing
8 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Current situation:• Standardisation of (electronic) invoice exchange is
realised in several initiatives (e.g. PEPPOL, Simplerinvoicing). This is complementary to the model, not conditional
Starting point• Accounting software providers and other actors in the
invoice and finance chain have to team-up for standardisation of finance requests invoice status and its electronic exchange
Next step:• Create a network between buyers, suppliers and their
preferred financiers to exchange status information and fund request via their preferred invoice solutions!
Defined roles and responsibilities to create a network for standardised exchange of invoice status information and finance requests is required
Trinity of standardisation could be a key driver for SMEs financing (i.e.‘One-Click-Finance, ‘Track-and-Trace of invoices’)
9 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Introducing the Status Based Receivables Finance (i.e. SBRF) concept
Legenda:1. Invoice approval2. Invoice approval + risk information3. Fund request4. Invoice approval + fund request5. Payment/approval
The SBRF model is:- Based on three enabling roles: Financiers, Status
Aggregator and Status Broker that exchange the information
- 4-corner,: not relying on a single central party (e.g. platform) Supplier and Buyer select their own preferred service provider or invoice solution
- Inclusive: network participants can play single or multiple roles
- Easy to use: a single (web-based) dashboard (e.g. ERP software)
- Complementing open international standards (e.g. UBL, XML)
- Cross-border: every EU actor should be allowed to participate
Preferred ERP/invoicing solutionPreferred ERP/invoicing solution
• Applies internal procedures to check and verify invoice
• Sends invoice status information to Status Broker e.g. approved, verified, payment guaranteed
Buyer• Receives finance request
from Status Aggregator • Performs risk analysis• Selects relevant finance
requests based on their risk appetite and criteria
• Communicates acceptance to Supplier and pre-pays invoice (or batch) to Supplier
Financier Supplier• Administers and/or sends
invoice via preferred ERP/invoicing solutions
• Submits a ‘one-click’ fund request via per invoice or selection of invoices
• Selects best financing offer
• Receives finance request from Status Aggregator
• Broadcasts finance requests to Financiers
• Receives invoice status information from Status Broker
• Receives finance requests from Supplier
• Forwards information to Finance Exchange
• Enables access to finance on selected invoices
• Market players: software provider, service provider
• Receives invoice status information from Buyer
• Forwards this to Status Aggregator
• Optional: enrichment of invoice status (e.g. transaction history, solvability)
• Market players: bank, non-bank (e.g. software vendors, data providers)
3 1
2
4 5
5
Status Aggregator Status BrokerFinance Exchange
*The role of Finance Exchange is not in scope for development of SBRF network. Optional to include at later stage
10 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Accounting software providers are in a unique position to support SMEs funding needs and develop new business opportunities Company (happy flow) How can you participate in the network?
• Become a Status Aggregation (SA) point and partner with other service providers (e.g. ERP/invoicing solution), by aggregating invoice status information and fund requests
• Become a non-bank Status Broker, facilitate exchange of the invoice status and enrich by developing Buyer user profiles based on e.g. transactional data records
• Become a Financier, do it all at once and built your own SME financing experience yourself (i.e. inclusiveness)
Opportunities/Actionables for Software providers • Develop new propositions for customer needs
- Adding a one-click-finance button in dashboard
- Integrating invoice status information in invoice process
• Potential new revenue streams: Collaborate and create partnerships with other actors in the industry to optimise your customer base data opportunties!
Preferred ERP/invoicing solutionPreferred ERP/invoicing solution
• Applies internal procedures to check and verify invoice
• Sends invoice status information to Status Broker e.g. approved, verified, payment guaranteed
Buyer• Receives finance request
from Status Aggregator • Performs risk analysis• Selects relevant finance
requests based on their risk appetite and criteria
• Communicates acceptance to Supplier and pre-pays the invoice (or batch) to Supplier
Financier Supplier• Administers and/or sends
invoice via preferred ERP/invoicing solutions
• Submits a ‘one-click’ fund request via per invoice or selection of invoices
• Selects best financing offer
• Receives invoice status information from Status Broker
• Receives finance requests from Supplier
• Forwards information to Finance Exchange
• Enables access to finance on selected invoices
• Market players: software provider, service provider
• Receives invoice status information from Buyer
• Forwards this to Status Aggregator
• Optional: enrichment of invoice status (e.g. transaction history, solvability)
• Market players: bank, non-bank (e.g. software vendeors, data providers)
Status Aggregator Status BrokerNotes:• Possible roles for
software providers are depicted in orange
• Preferred condition: “cloud” software solutions
• Invoice status information and finance requests flows are depicted in black
11 SBRF model – SCF Community & Innopay – December 3rd, 2015. © Innopay BV. All rights reserved.
Participate in this initiative and reap the benefits: interested? Reach out to us!
Create new options for the futureEngage in new partnerships, develop new business opportunities and set alternative market perspectives
Corporate Social Responsibility (CSR) & InnovationImprove SME financing together with your customers, business partners and network actors
New revenue streamsRealize new revenue streams and utilize growing markets as part of a digital economy
Further broaden expertise Increase your professional network and expertise on invoicing and financing
Pepijn Groen
+31 6 24 89 72 99
Chantal van der Velde
+31 6 42 36 80 66
Location & DateContinously
ContentGathering in-depth
knowledge/discussing implications and benefits of
the model
Personal consultation
Free Webinar
Workshop
Location & DateDecember 10th 2015
Time: 15:00 – 16:00 hrsContent
Explanation of model and project information
Click here to register
Location & DateFrankfurt, January 15th 2016
(Time to be announced)Content
Further exploring SBRF concept in final preparation
for next project phase
Benefits for participants How can you contribute or learn more about this initiative?
Douwe Lycklama
+31 6 55 71 11 50
We hope you are triggered by this initiative. Please contact
us!
