One of my regular readers, who happened to be a competitor to PrimeRevenue pinged me recently to enquire about my views on the recent announcement of partnership between PrimeRevenue and Morgan Stanley. Before I give my viewpoint, for consistency, I believe it is useful to first introduce the company in here.
PrimeRevenue is a leading company in Supply Chain Finance (SCF). According to my new friends, Paystream Advisors:
The combination of PrimeRevenue?s technology and services makes it an excellent choice for organizations seeking to accelerate cash conversion cycles and compress working capital requirements. We are impressed with the company?s evolving vision and solution functionality.?
PrimeRevenue introduces its SCF platform as a community of global 2000 buyers, their suppliers and world-class financial institutions. The core competencies seem to be in technology, working capital expertise and enablement services; three ingredients vital for successful delivery of SCF solutions. Let’s have a quick look at their technology platform:
The technology platform allows the buying organisation to upload an electronic output from its Accounts Payable (A/P) system with approved payable date, amount, etc. Supplier is given the ability to log onto the platform to view approved payment details. Suppliers can then use payment approvals to negotiate early payment through financial institutions. PrimeRevenue charges a funding fee for this service. A remittance advice is issued to suppliers as part of the service. At the end of the normal payment terms, the buying organisation remits payment to its central clearing account, and the platform issues Electronic Fund Transfer (EFT) instructions, which distribute payments to each supplier accordingly. The platform allows payment cycles to be reduced to as little as 48 hours utilising Virtual Private Networks (VPNs).
Now, just imagine the power of this platform, if it could be offered securely without VPN technology. Then imagine adding an electronic document exchange solution. And the new solution would start to look like:
- Supplier organisation prepares the invoice on its back-office system.
- The web based electronic document exchange (Hub) that the back-office system is linked to senses the completion of a new invoice, collects it electronically and translates it to Hub’s internal data format.
- Now the invoice can be run through a pre-configured set of criteria set by the Buying organisation.
- Once the pre-set criteria is met, the invoice is translated to Buying organisation’s data format and electronically delivered to the Buying organisation’s back office system.
- Buying organisation approves the invoice after comparing it with applicable purchase order, either within its back-office system or within the Hub if the purchase order was sent through the hub.
- Approvals details are automatically informed to the supplier through the Hub.
- The invoice financier is automatically notified of approval of the invoice and planned payment dates, as the financier has access to transaction status in real time.
- Supplier is now presented with number of options, one being “get paid now”. If chosen, supplier receives a percentage of the payment (discounted or factored).
- And so on…
That was how ebdex saw its future – ebdex Document Exchange.
In addition to the technology, PrimeRevenue is well experienced in working capital solutions, working with supplying and buying organisations to offer optimum solutions to meet their specific requirements. This is further strengthened by an end-to-end implementation programme.
Unfortunately, PrimeRevenue does not seem to have an office in the UK. Wonder whether they have any UK clients! Over the next few weeks, I will do at least two more articles, these being:
- Review of partnership deal with Morgan Stanley – Most likely I need to establish contact with them to find out more
- Review what my friends at Paystream Advisors have said in 2006.
As I intend to take vendor analysis seriously, I also need to think of:
- Structure for the blog articles on vendor analysis.
- Analysis Report that would combine number of refined blog articles.
- How to make money…(heard about a great forthcoming service called edocr! Can’t wait to see it happening)