HSBC digital trade banking offers early payment for Sri Lanka suppliers

ECONOMYNEXT – HSBC is offering a web-based supply chain finance platform initially targeting Sri Lanka apparel exporters that the bank says can make early payments to suppliers, optimise working capital and reduce costs.

Ajay Sharma is the Regional Head of Global Trade & Receivables Finance for HSBC in Asia Pacific said digital platforms offer improves visibility, cuts out paper and reduces turn around times of transactions.

But, he told a forum, “productivity benefits of digital only come when everyone in the cycle embraces these solutions.”

HSBC said its Supply Chain Financing platform, launched last month, helps optimise working capital, and reduce supply chain costs and manual errors.

It supports buyers by optimising payment terms negotiated and agreed with sellers, increasing liquidity and boosting payment efficiency.

“By injecting liquidity into the supply chain, they can extend supplier network and enhance strategic supplier relationships.”

HSCF’s interface allows buyers to upload several invoices with a single click and can also provide accurate forecasts on future cash flow by extracting and analysing data in various formats, supporting the business’s reporting process.
The suppliers that buyers choose to join HSCF will receive early payments based on buyers’ credit ratings, resulting in competitive capital cost benefit, said Nikhil Dhar, senior structured trade solutions manager, HSBC Hong Kong.

On receiving goods and commercial documents like invoices from suppliers, buyers can upload the invoice file onto the platform, approve them online and the buyers’ bank, which could be HSBC, will effect early payments to suppliers.

But Dhar said suppliers need not be HSBC’s customers or maintain accounts with HSBC.

HSBC said the platform currently supports over 20 languages such as English, French, Japanese, Chinese, Italian and German.

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“With this programme, suppliers may effectively decrease ‘Days Sales Outstanding’ and enjoy additional working capital without leveraging bank credit lines. It also minimises collection, cash management and insurance costs.”
(COLOMBO, 07 November 2019)

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