UPCOMING EVENTS
Bank of England report acknowledges importance of buyer driven payables
07/27/2010
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Oxygen Finance supports report findings and emphasises commitment to furthering buyer driven payables programmes
London, 27 July 2010: Oxygen Finance (www.oxygen-finance.com), which provides a new procurement and accounts payable operating model, today announced its support for the Supply Chain Finance Working Group (SCFWG) report which champions Buyer Driven Payables Programmes as key to easing funding conditions in UK business.
The report, requested by the Bank of England, observes that buyer driven programmes are seen as more efficient than traditional invoice discounting and should enable suppliers to secure better funding rates than they could independently. Despite suggesting a future focus on Buyer Driven Receivables programmes to expand the SCF market, the report identifies Buyer Driven Payables programmes, such as the Early Payments Programme offered by Oxygen, as having more benefits than any other methods. The benefits identified include:
• Appropriate transaction fees can create a higher return on committed cash for Treasury functions
• Early payment discounts from suppliers offer more competitive rates than otherwise available
• Easy planning of benefits and facility requirements
• Reduced risk in the supply chain
• Cash benefits are released
• Discounts offset external financing costs
The SCFWG report also identifies the importance of a technology platform, which can be provided by an independent solutions provider, and sits between the buyer, supplier and the funding mechanism. Oxygen’s platform offers a new Procurement and Accounts Payable operating model. Its Early Payment Programmes enable buying organisations to leverage their credit rating and collaborate with suppliers in a mature manner to provide mutual commercial benefits.
David Brown, CEO, Oxygen Finance comments, “The report by the Supply Chain Finance Working Group is very insightful, and we fully support the findings. It is crucial that funding conditions are eased for UK businesses and we are delighted that the report has acknowledged the ability of Buyer Driven Payables programmes, something that Oxygen has been championing - to address the issues here and improve cash-flow and working capital for buyers and suppliers.”
Oxygen has also developed robust processes to support buyers in ensuring transaction fees are set appropriately and assist buyers in securing funding that can create cash-flow improvement. Oxygen has also developed off balance sheet models to ensure that it can support businesses in terms of their correct accounting treatment.
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