Category: Technology & telecoms
Summing up: An ambitious programme to offer entirely optional early payment facilities to all suppliers in the supply chain, at competitive rates and with free-to-use e-invoicing tools
What the judges said: “Vodafone and Taulia created a unique funding instrument for suppliers. The programme demonstrated a huge step-up compared to the original SCF programme. The scalability is enormous and gives SMEs easy access to early payment.”
- The first true supplier financing/early payment programme to be offered to the majority of suppliers in the supply chain
- A unique funding vehicle that allows institutional investors and corporates to invest in the programme
- More than 1,400 suppliers signed up within nine months and hence able to elect to receive early payment: Ultimate goal: all 10,700 suppliers
- Suppliers are offered free-to-use e-invoice tools
- Programme has proved attractive to small suppliers and large – such as Huawei
In 2010, Vodafone rolled out a bank-led supply chain finance programme that was made available to the company’s larger suppliers, accelerating some $6bn of spend annually. This programme, which remains in place supporting the larger suppliers, could not readily be scaled up to include medium-sized and smaller suppliers.
In 2013 Vodafone decided to address this by extending SCF to these smaller suppliers, thereby making it able to offer SCF to all of its suppliers, covering some $10bn of spend. Furthermore the offering would provide competitively-priced finance and make Vodafone a ‘customer of choice’ for its suppliers.
The programme had five key ambitions:
- Ensure that all suppliers can take advantage of early payment
- Keep it completely optional: suppliers must not be forced to accept early payment
- A simple online registration process
- Trade payables to maintain their status for accounting purposes
- Capable of full integration with SAP
Vodafone wanted an e-invoicing platform that would enable it to approve invoices more quickly, thereby opening up the opportunity for earlier payment than would otherwise have been possible. It also wanted to offer e-invoicing tools to suppliers free of charge.
Taulia was selected as the technology platform while Greensill Capital facilitated third-party funding.
The result has been a programme that has seen a rapid rate of take-up with five countries now live for supply chain finance and 11 for e-invoicing. Of the 2,200 suppliers invited to enrol for the early payment programme, 64% have signed up. More than half of all suppliers are using the free-to-use e-invoicing and supplier self-service tools, reducing the time suppliers and Vodafone have to spend dealing with queries.
“This programme is now delivering real value to our liquidity cycle, and we can demonstrate tangible benefit to our business divisions. Above all else, it has tightened the relationship with one of our largest global customers,” said one supplier in a testimonial.
The judges said this programme demonstrated “excellent onboarding of suppliers to the supplier financing platform”, adding that they liked how everything was optional rather than required.