Integrating document flow and financial flow

Proven to be connected to various core bankings, loan systems and various loan products

Risk management & mitigation such as hold balance, freeze accounts, escrow balance, auto grab, etc.

Optimizing Working Capital Performance through Supplier Financing & Financial Liquidity through Distributor Financing

Electronic Invoice Presentment & Payment provides document workflow, dispute management, and various multiple disburse & payment channels that are connected to networks of major banks in Indonesia using ESPAY Payment Gateway

The processes of goods are delivered from the principle or factory to the retailer and have unique supply chain processes within each layer. The Principle needs to focus on producing goods that meet the market needs through market surveys, research and development, and using all equipments for mass production, product packaging, marketing communication and brand awareness. The distributors are needed to ensure all the products are transported from the factory to the warehouse and finally to the market. The Principle needs to push the quantity to the distributors, and place payment terms that need to be fulfilled ontime. Among these payment terms are corporate deals. Distributors need to have large network of retailers through their regions. For FMCG their sales cycles are weekly. Eventhough they have low margin, they need to cycle the sales and collect the payment immediately.

The Distributor’s main focus is to push sales to the retailer and to manage logistics and delivery. The retailers somehow, are traditional, since they receive cash from the end- customer. Retailers also avoid to put their money in the bank, because it is a waste of time. They are unbankable. The challange from the bank to the Principle – Distributor is to fulfill the payment terms of the distributor, which is to achieve low margin, and to help the distributor collect payment from traditional retailers that owns cash, and settle payments frequently and fast. Some of the retailers are happy with the turnover so that they do not need additional capital. Formal financial deals such as banks and tax scare them. To gain sales, they need to shop for groceries more frequently, usually once to twice a week.

The Distributors

Are mostly needed if the country or area has very large geographical areas -or-when the principle is not present in the country/area. Distributors act as an extended hand to reach the retailer in the domestic area. Distributors also have the target to absorb the goods produced. Commonly the distributors are old players, and already know about their area, have a good relationship and are well known by the SME market and retail owners. The distributors also have a long and strong cashflow cycle. Their mission is to penetrate and distribute goods and services consistently.

The Principles

Can be factories or institutions that create and produce the goods or services. The principles’ goals are to research and to produce goods or services according to the market’s needs, to communicate the brand, and to market the products, so the market knows the solution. Their business demands high investment and high cost for manpower and R&D. They have to be creative and reliable to fulfill the market’s needs.

The Hybrid Model

Combination between pre-and-post financing, in order to solve liquidity and capital optimalization of the principles. The facilities used can be switched from member to principles and the other way.

Modern retailers require a big capital in the market. They have bargaining power. Suppliers need them to make their product available everywhere. This is not just about sales, this is about mind perception, marketing and the brand. A lot of effort is put into the Principle’s products in terms of marketing and brand awareness programs. This is very important in order to make the products easy to find in the market. Modern retail has every power to penetrate and to be presented everywhere. Not only big players, but SME also needs modern markets to channel their products. Fast moving fresh products such as fruits, vegetables, poultry, meats, and seafood are supplied locally. Most of them are coming from corporations and SME, and not big enterprises with sophisticated cashflows. As a big enterprise, the retailer also has scheduled payments and conducts very strict processes towards the supplier. For the supplier with limited cashflow, this will be painful and could affect the production.

Supplier financing gives suppliers the opportunity to receive the payment ahead of schedule at a discount rate. Banks will trust the retailer as the anchor, so that any approved invoice will be paid on schedule. Based on this, the bank can disburse the payment earlier with a discount to the supplier. On the due date, the retailer will pay the supplier the amount that appears on the invoice. This scheme will be beneficial to both parties. The supplier will have enough capital to fulfill the production and the retailer has been given a guarantee from the supplier to fulfill the needs.