In this market of overnight delivery for consumers’ orders, it is somewhat perverse that globalisation of manufacture has seen an increase in the lengths of supply chains. This leads to an increase in payment terms due to the desire of many buyers to not pay for 45, 60 or 90 days.
Factoring invoices has not been a very economic alternative for most companies and often driven by necessity in a time of weakness however the total turnover for the factoring and commercial finance industry across the EU in 2017 was 1.6 Trillion Euros.
One of the Living Labs, designed to test the concepts of SELIS, has been researching the possibilities of providing sufficient quality data about the effectiveness of a shipper’s or retailers supply chain to successfully quantify the risk inherent in a supply chain of good financial risk companies. By using their supply chain data, the unknown risk of default becomes quantifiable significantly reducing the cost of factoring.