supply chain invoicing

Supply chain finance (SCF), also known as supplier finance or reverse factoring, is a set of financial solutions designed to optimize cash flow and working capital management within a supply chain. It involves financial transactions initiated by a buyer (the ordering party) to enable their suppliers to access funding for their receivables at lower interest rates than those typically available through traditional commercial financing. SCF aims to strengthen the financial stability of the supply chain while reducing risks and costs for all parties involved.
A 2015 report suggested that SCF at that time had a potential global revenue pool of $20 billion.
Reverse factoring differs from traditional factoring, where a supplier wants to finance its receivables by securing earlier receipt of funds from a third party. In 2011, the reverse factoring market was still very small, accounting for less than 3% of the factoring market. The technique has been used in wealth management schemes to defraud investors, for example by the second largest Chinese real estate company, Evergrande Group.

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