Supply chain tool speeds funding of invoices and improves cash flow

High-end application developer Atimi Software uses cloud-based PrimeRevenue to trade receivables from Kellogg to financiers and receive earlier payments in exchange for small fee.

A premium application developer is using a cloud-based supply chain platform to receive faster payments from a customer and reduce cash-flow risks.

Pieter Dorsman, CFO of Atimi Software, said he used PrimeRevenue's OpenSCi supply chain tool to sell invoices for an application his company built for Kellogg Co. Financiers bought the invoices in return for a small fee, he said.

Dorsman said it could take Kellogg about four months to pay the invoices, but Atimi can be paid in as quickly as five or six days through the supply chain tool, depending on how fast the buyer approves the invoice. He said the financing fee on the platform fluctuates and could be 1% to 2%.

"That's why we have increasingly been using PrimeRevenue," he said. "PrimeRevenue gives us access to the cash we need in a much shorter timeframe than if I were to wait until Kellogg sends me the check or a wire for the amount I am invoicing."

More than $100 billion in transactions were processed last year on the PrimeRevenue platform, according to the vendor. There are close to 60 banks and other funders that buy the invoices.

PrimeRevenue and the funder receive portions of the finance fee. PrimeRevenue, based in Atlanta, does not charge subscription fees to any clients on OpenSCi, according to Stephanie Wargo, director of marketing for PrimeRevenue.

Dorsman, who said he would recommend PrimeRevenue to other suppliers, was impressed with the vendor and the "total win" his company received by using the cloud-based supply chain software. The funder basically pays the supplier "99 cents on the dollar" for the invoice and then the funder waits for the buyer's payment to hit its bank account, he said.

"Not everyone needs to use it, but if you have cash-flow issues and there is a long lag time between submitting an invoice and getting paid, it is definitely something you want to consider," he said." It adds real value for your business."

User cites ease of use, automated transactions

Dorsman said he uses the supply chain tool on his laptop. "It is all done automatically," he said. "It is all done online. I don't have to do anything. I just have to submit the invoice to Kellogg. Kellogg puts it into the PrimeRevenue portal and that triggers the cash that will end up in [Atimi's] bank account a few days later."

Dorsman said Kellogg told him about the supply chain tool as a way to speed payments of invoices for a high-end native mobile application for marketing purposes. He said the financing fee is well worth it.

PrimeRevenue supply chain finance platform
Steps for supply chain financing in the PrimeRevenue platform.

Atimi, based in Vancouver, B.C., has used PrimeRevenue for only Kellogg but he would consider it in the future for other buyers, Dorsman said.

"It certainly does reduce my cash-flow risks and the risk of nonpayment," he said.

Tom Roberts, senior vice president of global marketing at PrimeRevenue, said that as soon as a buying organization approves the invoice, it is available for the supplier to go ahead and trade it. The supplier can trade it manually on the supply chain tool or the vendor can set it up to trade automatically for the supplier.

Roberts said it is a three-way marketplace with tens of thousands of suppliers on the supply chain finance platform.

"We make the platform available that brings together buyers, suppliers and the funders. We make that whole cloud-enabled platform available so all of this exchange of receivables and advance payments can happen."

The supplier also receives an accounting benefit from early payment because the supplier does not have to carry the receivable as debt on its balance sheet. "That is a huge benefit for suppliers," Roberts said.

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