Supply Chain Finance is defined as the use of financing and risk mitigation practices and techniques to optimise the management of the working capital and liquidity invested in supply chain processes and transactions. Supply Chain Finance is typically applied to open account trade and is triggered by supply chain events. The visibility of underlying trade flows by the finance provider(s) is a necessary component of such financing arrangements which can be enabled by a technology platform.
Account receivable is a legally enforceable claim for payment held by a business entity against its customer for goods supplied or services rendered in execution of the customer’s order, and is recorded on the balance sheet. Such claims generally take the form of invoices raised by a business and delivered to the customer for payment within an agreed timeframe.
Accounts Receivable Discounting is a form of a flexibly applied Receivables Purchase in which sellers of goods and services sell individual or multiple receivables (represented by outstanding invoices) to a finance provider at a discount.