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The improvement in liquidity, creditworthiness and equity ratio is a factor for many companies. A cooperation between Erste Group subsidiary Intermarket Bank and EDI service provider EDITEL enables companies to convert their open invoices into liquid funds immediately and easily at the click of a mouse.
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Almost every company in Austria that operates Electronic Data Exchange (EDI) is at the data hub eXite connected by EDITEL. Business documents such as orders, delivery notes or invoices are automated and exchanged in real time via eXite. With the supply chain finance service from EDITEL and Intermarket Bank called “e-discounting“Receivables can be pre-financed automatically. “The cooperation with the Intermarket Bank is the perfect connection between two worlds. With e-discounting, the suppliers transmit their invoices to retailers as usual via our data hub, but if necessary, up to 100 percent of the invoice amount is immediately transferred to their account at Erste Bank or a savings bank of their choice, ”explains EDITEL Managing Director Gerd Marlovits the new form of factoring. The technical processing takes place automatically in the background via the interconnected systems from EDITEL and Intermarket.
Factoring: Bank also assumes the default risk of the receivables
For retailers, the bills look like they always do. As usual, you only transfer the open amounts to the accounts of your suppliers at the end of the agreed payment term. Thanks, however, the money is automatically forwarded to the Intermarket Bank, which has advanced the money to the suppliers. The Intermarket Bank charges the suppliers usual market interest and expenses, but the bottom line is that e-discounting is one of the cheapest forms of debt financing.
“The Intermarket Bank even assumes the risk of default if the supplier’s customer gets into payment difficulties. In addition, the immediate crediting of the outstanding amounts improves the supplier’s liquidity. As a result, the reduction in delivery receivables will reduce total assets and improve the equity ratio, ”explains Patrick Götz, CEO of Intermarket Bank.
Clearing account as a requirement
“The target group for e-discounting are primarily Austrian production companies that supply the retail or wholesale trade in Austria with their goods,” explains Marlovits, whose company also works in Central and Eastern Europe Electronic data exchange of business documents is leading. The only prerequisite for participating in this modern form of factoring is a clearing account with Erste Bank or a savings bank and the electronic exchange of invoices via the EDI service eXite. In contrast to classic factoring, thanks to the high degree of automation in the electronic data exchange of business documents, even small and small invoices from a supplier can be easily bundled and immediately converted into liquidity.
All information about the advantages of factoring and a comprehensive explanation of the modalities can be found here.
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