The COVID-19 pandemic brought regional supply chains to a halt, but what is emerging during the recovery is unlike anything markets have seen before.
2021-06-06 02:00
Supply chain finance
Supply chain finance provides a range of financing and risk mitigation solutions designed to optimise working capital and liquidity in domestic and international supply chains. Our solutions differ depending on whether you’re a supplier (receivables finance) or buyer (payables finance).
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Supporting our customers with flexible solutions
Knowledge experts
Banking specialists who bring local knowledge and a deep level of expertise to the table. We challenge our customers thinking and offer innovative solutions for how best to move their business forward.
Well connected
Our network is unique amongst Australian banks. On the ground presence in 32 countries so that we have the local knowledge backed by an extensive global team.
Working capital
Liquidity is a constant challenge for businesses. By facilitating affordable working capital, we can help strengthen the relationship between suppliers and distributors.
Digital transformation
Shifting from paper-based processes to using new technologies like blockchain and APIs will reap rewards.
Acknowledged as the #1 bank for supply chain finance for 7 consecutive yearsdisclaimer
Receivables finance is a supplier-led working capital solution, where the supplier (ANZ customer) sells to ANZ the trade receivable due from its buyer (approved by ANZ), on a limited recourse basis to the supplier. ANZ has the right to receive payment from the buyer, and in the event of non-payment, the ability to enforce this right against the buyer.
Potential benefits of receivables finance
- Access to cheaper funding as early payment to the supplier is offered at a financing cost reflective of the buyer’s credit worthiness and hence is typically lower than the supplier's own financing cost
- Reduce Days Sales Outstanding as discount allows for acceleration of cash and provides an alternative source of funding away from core debt
- The supplier receives a purchase order for goods or services from their buyer
- The supplier fulfils the order by delivering the goods or completing the service and invoicing the buyer – evidencing a future payment obligation of the buyer
- If the buyer has been approved by ANZ, the supplier can present the invoice together with a purchase request to ANZ
- If ANZ accepts the purchase request, we will purchase the invoice at the pre-agreed purchase price
- ANZ takes an assignment over the purchased receivable
- At the invoice due date, the buyer pays the full invoice value to ANZ
Payables finance is a buyer-led, digital solution that allows a buyer (ANZ’s customer) to arrange early payment of approved invoices due to suppliers.
Potential benefits of payables finance
- Improve supplier loyalty through arranging early payment at a financing cost reflective of the buyer’s credit worthiness and reducing the risk of non-payment
- Early payment to suppliers for goods sold or services completed supports a healthy financial base to provide a consistent service
- The buyer places an order for goods or services with its supplier
- The supplier fulfils the order by delivering the goods or completing the service and invoicing the buyer – evidencing a future payment obligation of the buyer
- The buyer uploads the approved invoice and provides a payment undertaking to ANZ that they will pay the full invoice value to ANZ on the invoice due date
- The supplier is able to view all accepted invoices on the supplier portal and request a selection of invoices or all invoices to be paid early by ANZ
- ANZ can choose to accept the purchase request and pay the supplier at the requested early payment date at a discount to the invoice face value
- At the invoice due date, the buyer pays the full invoice value to ANZ
Sustainable supply chain finance
Sustainable supply chain finance provides the benefits of traditional supply chain, with the additional benefit of rewarding, incentivising, and funding sustainable supply chain behaviors.
Potential benefits of sustainable supply chain finance
- Reinforce a Company’s commitment to sustainability
- Strengthen the sustainability expectations for Suppliers and Buyers
- Improve the security of the supply chain
- Achieve a lower cost of funds for sustainability out performance
Improving Carlsberg's cash flow
ANZ delivered a fully digital solution which allowed Carlsberg to support their suppliers by providing them access to low cost capital (leveraging Calsberg India's credit rating) and simultaneously improving the cash to conversion cycle without negatively impacting the balance sheet.
"Businesses are looking to their banking partner for guidance on how to navigate the emerging supply chain challenges and opportunities"
Simone Fynmore - Head of Supply Chain Product, ANZ Institutional
ANZ Insights
The latest market-leading news, analysis and thought leadership from our experts across more than 30 global markets.
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Developing and operating sustainable supply chains is likely to improve investor and consumer perceptions, manage costs and drive innovation.
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Shifting supply chains amid a reorientation of Asian trade have not impacted mainland China’s dominance.
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#1 for Market Penetration for Supply Chain Financing, Peter Lee Associates Large Corporate and Institutional Transactional Banking Survey, Australia 2015-22
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