Reply To: What is the difference between Supply Chain Finance and Invoice Discounting?

[John Babu]

Supply chain finance, also called payables finance, is a good way for a business to boost its working capital to use in its daily operations. It works out well for both the buyer and the seller and helps them get the most out of their cash flow.

There are three parties involved in a supply chain finance set-up:

1. Buyer

2. Seller

3. Financier

Invoice discounting is a way for businesses to get money by using their sales ledger as collateral. Companies can use their unpaid accounts receivable to get access to funds and boost their immediate cash flow.

Most of the time, there are two parties involved in invoice discounting:

1. Seller

2. Financier