Glossary
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Trade Receivables
Last Updated: June 22, 2026Trade receivables are the amounts customers owe a business after buying goods or services on credit. They’re a subset of accounts receivable — the part that comes from core trading activity — and they’re usually one of the largest current assets on a B2B balance sheet. What They Are When a business sells to another...
Supplier Relationship Management (SRM)
Last Updated: June 22, 2026Supplier Relationship Management is the systematic approach to evaluating, managing, and developing a company’s interactions with its suppliers. It treats suppliers as strategic partners rather than just vendors — with the goal of better pricing, quality, innovation, and supply chain resilience. In supply chain finance, SRM is the framework that makes early payment programmes commercially...
Source-to-Pay (S2P)
Last Updated: June 22, 2026Source-to-Pay is the end-to-end process that covers everything from sourcing strategy and supplier selection through to paying for delivered goods and services. It’s broader than Procure-to-Pay — it extends upstream into strategic sourcing, supplier evaluation, and contract management, across the full lifecycle of a buyer’s commercial relationship with its suppliers. What It Is Procure-to-Pay (P2P)...
Cash Flow Management
Last Updated: June 22, 2026Cash flow management is the process of monitoring and optimising the timing and volume of cash entering and leaving a business. Cash flow forecasting predicts future positions; cash flow management acts on those predictions. It’s the set of short-term decisions that keep a business liquid enough to operate. What It Is Revenue and profit are...
Cash Flow Forecasting
Last Updated: June 22, 2026Cash flow forecasting is the process of estimating the amount of cash a business expects to receive and pay out over a defined future period. It helps treasury teams anticipate funding gaps, plan liquidity reserves, time supplier payments, and decide when to use supply chain finance tools. What It Is A cash flow forecast tracks...
2/10 Net 30 (Early Payment Discount)
Last Updated: June 22, 20262/10 net 30 is a standard trade credit term that offers the buyer a 2% discount on an invoice if payment is made within 10 days, with the full amount due within 30 days if the discount is not taken. It’s a standard early payment discount structure in B2B trade and the basis for understanding...
Working Capital Ratio
Last Updated: June 22, 2026The working capital ratio — also known as the current ratio — measures a company’s ability to meet its short-term financial obligations using its short-term assets. It is a widely used indicator of financial health and liquidity, and is closely monitored by lenders, investors, and supply chain finance providers when assessing creditworthiness and programme eligibility....
FASB / IFRS Accounting Treatment for Supply Chain Finance
Last Updated: June 22, 2026The accounting treatment of supply chain finance programs — particularly reverse factoring — has become a significant area of focus for standard-setters, auditors, and CFOs. Both the Financial Accounting Standards Board (FASB) in the US and the International Financial Reporting Standards (IFRS) body have issued guidance requiring greater transparency around how SCF obligations are classified...
AML (Anti-Money Laundering)
Last Updated: June 22, 2026Anti-Money Laundering refers to the laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. For financial platforms, AML compliance is a legal obligation — every transaction must be monitored for signs of financial crime, and suspicious activity must be reported to the relevant authorities. What It Is Money...
KYC (Know Your Customer)
Last Updated: June 22, 2026Know Your Customer — universally abbreviated as KYC — is the process of verifying the identity of clients before and during a business relationship. For regulated financial platforms, KYC is not optional. It is a legal requirement under anti-money laundering (AML) legislation, designed to prevent financial crime, fraud, and the misuse of financial infrastructure. What...
Open Banking
Last Updated: June 22, 2026Open banking is a financial services model that allows third-party platforms and applications to access bank account data and initiate payments through secure APIs, with the customer’s consent. For supply chain finance platforms, open banking enables faster onboarding, real-time financial visibility, and seamless payment execution — without requiring businesses to manually share statements or route...
Trade Finance
Last Updated: June 22, 2026Trade finance refers to the financial instruments and products used by companies to facilitate domestic and international trade transactions. It covers the mechanisms that bridge the gap between when a seller ships goods and when a buyer pays — managing the risk, timing, and liquidity challenges inherent in commercial trade. What It Is In any...
Working Capital Management
Last Updated: June 22, 2026Working capital management is the process of optimising a company’s short-term assets and liabilities to ensure it has sufficient liquidity to meet operational needs while maximising the efficiency of its capital. Effective working capital management reduces the cash tied up in the business cycle, lowers financing costs, and creates the financial flexibility to invest in...
Procure-to-Pay (P2P)
Last Updated: June 22, 2026Procure-to-Pay is the end-to-end process that covers everything from identifying a need to purchase goods or services through to paying the supplier. It spans procurement, receiving, invoice processing, and accounts payable. What It Is The procure-to-pay process connects two departments that often operate in silos: procurement and finance. Procurement identifies what the business needs and...
Accounts Receivable (AR)
Last Updated: June 22, 2026Accounts receivable is the total amount owed to a company by its customers for goods delivered or services completed but not yet paid for. It sits on the balance sheet as a current asset and represents cash that the business has earned but not yet collected. Managing AR — and financing it — is a...
Accounts Payable (AP)
Last Updated: June 22, 2026Accounts payable is the total amount a company owes to its suppliers and vendors for goods or services received but not yet paid for. It appears as a current liability on the balance sheet and is a key lever in working capital management — the longer a company manages its payables, the more cash it...
Reverse Factoring (Payables Finance)
Last Updated: June 22, 2026Reverse factoring is a buyer-led financing solution that allows suppliers to receive early payment on approved invoices, based on the buyer’s credit profile rather than the supplier’s. It improves supplier liquidity without changing existing commercial terms, while giving buyers greater control over payment timing and working capital strategy. What It Is In a standard payment...
Invoice Financing
Last Updated: June 22, 2026Invoice financing is a form of working capital funding that allows businesses to unlock cash tied up in unpaid invoices before the payment due date arrives. Instead of waiting 30, 60, or 90 days for customers to pay, businesses access a percentage of the invoice value immediately — bridging the gap between delivering goods or...
Asset-Based Lending
Last Updated: June 22, 2026Asset-Based Lending is a form of financing where a business secures funding against the value of its assets — such as receivables, inventory, equipment, or real estate — instead of relying solely on its credit history or income. As assets are converted to cash or replaced, the financing facility adjusts accordingly. This creates a flexible...
BaaS (Banking-as-a-Service)
Last Updated: June 22, 2026Banking-as-a-Service is a model in which licensed financial institutions expose their regulated banking infrastructure to non-bank businesses through APIs. This allows those businesses to embed banking products — accounts, payments, cards, lending — directly into their own platforms and customer experiences. BaaS is the infrastructure layer that makes it possible to offer virtual IBANs, payment...
Cash Conversion Cycle (CCC)
Last Updated: June 8, 2026The Cash Conversion Cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter CCC means a business is more efficient at generating liquidity from its operations. Supply chain finance tools directly reduce CCC by shortening DSO and extending DPO. What...
Credit Limit
Last Updated: June 22, 2026A credit limit is the maximum amount of financing that a financial institution will extend to a buyer or supplier at any given time. It defines the ceiling for outstanding financing, controlling risk for the institution while giving users predictable access to liquidity. What It Is In supply chain finance, credit limits apply at multiple...
Days Payable Outstanding (DPO)
Last Updated: June 22, 2026Days Payable Outstanding measures the average number of days a company takes to pay its suppliers after receiving an invoice. A higher DPO means the company holds cash longer before paying, which improves working capital. Supply chain finance programs allow buyers to extend DPO without creating financial stress for suppliers. What It Is DPO is...
Discount Rate
Last Updated: June 22, 2026In supply chain finance and early payment programs, the discount rate is the percentage deducted from an invoice’s face value in exchange for early payment. It represents the cost of accessing liquidity before the invoice’s due date. A lower discount rate means cheaper early payment for the supplier. What It Is The discount rate in...
EBITDA
Last Updated: June 22, 2026EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. It is a widely used measure of a company’s core operating profitability, stripped of the effects of financing decisions, tax environments, and non-cash accounting charges. Lenders, investors, and supply chain finance platforms use EBITDA to assess a business’s financial health and creditworthiness. What It Is...
Embedded Financing
Last Updated: June 22, 2026Embedded finance is the integration of financial services — lending, payments, insurance, banking — directly into non-financial platforms, products, and customer journeys. Instead of requiring users to leave a platform and visit a bank or financial institution separately, embedded finance delivers the financial service at the moment it is needed, within the workflow the user...
Extended Payment Terms
Last Updated: June 22, 2026Extended payment terms allow buyers to delay payment for goods or services beyond the standard payment period agreed upon with suppliers. Instead of immediate payment, buyers receive additional time to settle accounts, typically in the form of net 30, net 60, or net 90 days. These terms are negotiated between buyers and suppliers and help...
Receivables Financing (Factoring)
Last Updated: June 22, 2026Factoring, also referred to as receivables finance or invoice finance, allows businesses to receive immediate payment for outstanding invoices. Instead of waiting 30, 60, or 90 days for customers to pay, businesses sell their invoices to a financial institution at a discount in exchange for immediate liquidity. What It Is When a business delivers goods...
Supply Chain Finance (SCF)
Last Updated: June 22, 2026Supply chain finance (SCF) is a financing solution that enables companies to offer early payment options to their suppliers. With supply chain finance, suppliers can receive early payment for their approved invoices from a bank or finance provider, while the buyer sends payment to the financial institution on the invoice’s maturity date. What It Is...
Virtual IBAN
Last Updated: June 22, 2026A virtual IBAN (vIBAN) is a unique bank account number that functions like a standard IBAN for receiving and identifying payments, but is not tied to a physical bank account in the traditional sense. Instead, it is a routing identifier that directs incoming funds to an underlying master account — while giving each user, transaction,...
Working Capital
Last Updated: June 22, 2026Working capital is the difference between a company’s current assets and current liabilities — the net liquid resources available to fund day-to-day operations. It is a fundamental measure of a business’s short-term financial health, operational efficiency, and ability to meet its obligations as they fall due. What It Is Every business has a cycle: buy...
White Label
Last Updated: June 22, 2026White labelling in financial services refers to the practice of one company’s product or platform being rebranded and offered by another company under their own name and identity. In supply chain finance, white labelling means that banks, financial institutions, and enterprise technology providers can offer a full SCF platform — its technology, workflows, and financing...
Dynamic Discounting
Last Updated: June 22, 2026Dynamic discounting is a flexible early payment solution where buyers offer suppliers the option to receive payment before the invoice due date in exchange for a discount. Unlike fixed early payment terms, the discount rate is dynamic — the earlier the payment, the higher the discount offered to the buyer. What It Is Traditional early...
Digital Wallet & Cards
Last Updated: June 22, 2026A digital wallet is a platform that stores payment information and can be enhanced with virtual account integration for multicurrency functionality and international payments. When integrated with virtual IBANs, digital wallets help users manage international finances, reduce reliance on intermediaries, lower costs, and simplify payment reconciliation. Virtual accounts connected to digital wallets can also be...
Days Inventory Outstanding (DIO)
Last Updated: June 22, 2026Days Inventory Outstanding measures the average number of days a company holds inventory before selling it. A lower DIO indicates faster inventory turnover and more efficient operations. Together with DSO and DPO, DIO forms one of the three pillars of the Cash Conversion Cycle. What It Is DIO tracks how long goods sit in storage,...
Days Sales Outstanding (DSO)
Last Updated: June 22, 2026Days Sales Outstanding measures the average number of days it takes a company to collect payment after a sale has been made. A lower DSO means the business converts its receivables into cash faster, reducing working capital pressure. Invoice financing and factoring are the primary tools for reducing DSO. What It Is Whenever a business...