Partner Article

Trading on equal terms

Imagine being able to do some work, submit the invoice, and get the payment within two to three days. What’s more, imagine having an easy way to do business with large companies on equal terms. It might sound like a pipe dream but Sid Vasili, CEO of Invapay, has made it possible. His company has an established platform on which companies can trade in a more even fashion. Vasili explains: “With our platform, companies can share their requirements, and also offers from suppliers. Both sides can trade dynamically. An SME can engage with a company to supply their services and agree terms. And once they’ve supplied the goods or services, the platform generates an electronic invoice and the supplier is paid in two days. It’s as simple as that.”

He says that this delivery of an early cash flow ensures SMEs aren’t starved of cash. This overcomes the problems of scarce and expensive funding endemic both with traditional and non-traditional funding.

“An SME can engage with a company to supply their services, agree terms, and once they’ve supplied the goods or services the supplier can be paid in two days“

The system handles everything electronically from the order to the payment, says Vasili. “Companies can view their current orders and invoices online. They can view everything from the request for goods or services, the sub-mission and acceptance of the order, and finally they can see when the payment is approved and cleared. Once the goods are received, the system raises the invoice and creates the supplier payment.”

“Large companies want to do business with SMEs, but the question is how can they connect to potential suppliers?“

The buyer has full control over when the order is approved and completed, and when the cash is released following delivery of the goods or service. Even situations where something goes wrong - such as non-delivery of requested goods - are handled automatically.

The buying organisation also benefits from cost reductions in the purchasing process because the Invapay platform handles the end to end process automatically, says Vasili: “To give an example, the cost of processing a normal purchasing transaction within a large organisation has been estimated by the research and analysis group Gartner, as up to £50.00 per individual invoice. . This would cover accepting the invoice and passing it through the different departments and business systems. Our site reduces this down to £1, freeing the remaining £49 to fund the early settlement of the invoice.”

Making connections

“Being a smaller company doesn’t have to hold you back from trading with the big boys“

Of course, attracting the attention of a large organisation can be a major hurdle. Vasili says it’s not that larger organisations don’t want to deal with small companies: “They do want to do business with SMEs, but the question is how can they connect to potential suppliers?”

He says it’s difficult for a small company to respond intelligently to tender requests, and the consequence is that smaller companies are disenfranchised. “They can’t reach large buying organisations because the costs of doing business are thought to be too high,” he observes.

From the SME viewpoint, slow payment by larger organisations is a major drawback to working with them, but Vasili says that the main cause of this is the inability of larger companies’ systems to allow early settlement. “Again, it’s not that they don’t want to do this, just that their internal systems are inefficient in letting settlement take place. We’ve worked in concert with the major banks and credit card providers to be able to deliver very early settlement, and this means the SME doesn’t have to chase cash. Their payments come through automatically.” He explains that this can be transformational for an SME. “It means you can go for work with more confidence because the improvement in cash flow is significant. You have peace of mind, and can focus on your core business.”

Vasili is clear that being a smaller company doesn’t have to hold you back from trading with the big boys. While large organisations might appear faceless and opaque, these days they are usually conscious of their social responsibility and want to carry out a greater percentage of their work with the local SME community. “It’s good for their company image,” says Vasili. “What’s more, central government says it wants to spend 25% of its budget with SMEs, so public sector organisations are keen to work with SMEs too.” Vasili’s message is clear; the business opportunities are there, it’s just a matter of making use of them.

This was posted in Bdaily's Members' News section by Invapay Payment Solutions Ltd. .