Need Cash? Two Tools to Get Paid Faster, Increase Access to Working Capital

Effectively managing your business requires having the liquidity and cash you need, when you need it. Yet today’s tight credit and stringent lending terms can make it harder than ever to maintain steady cash flow. The answer? Ariba Working Capital Management solutions.

A growing number of Ariba suppliers are taking advantage of these tools with remarkable results, accelerating payment by 20 days or more at rates 10 to 20 percent lower than through traditional methods. Check out the benefits and easy how-to process to see how your business can do the same.

1. Ariba Receivables Financing is an excellent way to turn your receivables into cash at a much better rate of return than other liquidity options. Delivered through Ariba ecosystem partner The Receivables Exchange, this supplier-focused solution works by letting you submit your receivables for auction through an online marketplace. Participating capital providers then bid on those receivables at competitive rates. Instead of relying on lending institutions or customers to open the gate, you handle the entire process yourself over a convenient online platform. It’s fast, too—you can begin selling receivables within a few days after signing up, and average auction length is just 24 hours.



Ariba Working Capital Management solutions can accelerate payment by 20 days or more at rates 10 to 20 percent lower than through traditional methods.

What are the benefits?

• Lower cost of capital than other credit resources, whose terms can be 24 to 36 APR or more
• Greater control over capital costs through tools that let you determine minimum bids, choose the highest bidders, and set other key parameters
• Quick, easy access to needed cash without requiring bank or customer support, giving you greater independence, flexibility, and control over cash flow for your business
• Reduced risk via expanded liquidity options — crucial in today's market where lenders can deny credit or hike up rates at any time
• Lets you leverage the strength of your Ariba® Supplier Network™ trading history to earn a favorable risk assessment and get better lending rates from capital providers
How do I get started?
Using Ariba Receivables Financing is easy. To sign up, simply go to http://www.ariba.com/programs/tre and follow the registration instructions there. An Ariba Receivables Financing team member will contact you to discuss the application process. Once you're approved, you'll need to select and upload the invoices you wish to finance, define parameters for each invoice (such as minimum and maximum payment rates and payment timeframes), and select either manual or automatic acceptance of financing bids that meet your criteria.



Make Working Capital a Competitive Weapon to Win Deals and Accelerate Payment, Sept 16, 2009: 2:00 p.m. EDT
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2. Ariba Discount Management provides another great resource for cash flow control, allowing you to obtain early payment on approved invoices in exchange for giving customers a discount.

What are the benefits?

• Flexible rate and payment terms let you negotiate discounts and payment terms in multiple ways, including:
  • Standing early payment terms that apply to all your invoices, such as "1/10 net 30" (which gives the customer a 1 percent discount for paying within 10 days of the invoice date; otherwise the full amount is due in 30 days)
  • Buyer-initiated dynamic discounting in which customers contact you to negotiate discount terms in exchange for paying their invoices early
  • Supplier-initiated dynamic discounting which lets you take the initiative by offering customers specific discounts in exchange for early payment
• Significant decrease in payment time, letting you reduce DSO by an average of 42 days
• Reasonable rates for early access to cash, with an average discount level of just 0.85 percent given in exchange for faster payment
How do I get started?
Typically, buying organizations invite you to participate in this method. However, you can enhance your eCommerce credibility by asking customers to enable discount management if they don't yet use it.

Questions?
To learn more about how Ariba Working Capital Management solutions can help your business, contact Drew Hofler at dhofler@ariba.com.