This is a fintech start-up solution using the cloud to address this company’s DPO challenges. They have digitally transformed their accounts payables, covering their end-to-end supply chain with a fully automated B2B supplier payment card solution.
Photo of Deven Somaya, Citi and Sid Vasili, Invapay collect on behalf of Hanson Australia.
Commercial Manager Corporate
Hanson is one of Australia’s leading suppliers of heavy building materials to the construction industry and a global leader in aggregates.
in partnership with
Hanson is continually seeking to improve working capital and drive operational efficiencies. Challenged to think ‘out-of-the-box’, a strategic opportunity was identified in procurement and accounts payable, by solving the problematic question of “How do we extend our days payable outstanding (DPO) to increase cash flow whilst benefitting suppliers by giving them early/certainty of payment?”
Hanson implemented an innovative commercial cards payment system for supplier payments. The system combines Citi’s commercial card solution to pay suppliers who historically have not accepted credit cards, combined with fintech start-up Invapay’s technology platform which removes the need for suppliers to have a merchant facility.
As Jim Fotoulis, Commercial Manager Corporate explains, “The B2B commercial card solution using the Invapay platform was first of its kind in Asia. It enables us to obtain the extended payment terms of traditional card payments, while effecting automated, secure and efficient payments to non-card accepting suppliers, in any location across the world in any currency.”
Best practice and innovation
Procurement and finance departments typically manage their operations according to established working practices.
What Hanson has done is to leverage strategic partnerships with Citi and Invapay, to digitally transform their accounts payable, covering their end-to-end supply chain with a fully automated solution that ensures a smooth payment process for its suppliers.
The use of commercial cards for B2B supplier payments is the first in Asia and in the construction industry. The innovation delivered by Invapay’s platform brings significant benefits to both Hanson and their suppliers. Best practices introduced include:
Automating supplier payments in less than two months
The procurement team at Hanson now use a Hanson commercial card issued by Citi, and have the payments delivered to their suppliers via the Invapay platform as electronic funds transfers (EFT). Invapay’s platform is multi-lingual, multi-currency, multi-tax and VAT/tax compliant, connecting Hanson with suppliers worldwide. Through Citi, the payment schedule (date/time) for approved suppliers can be customised, ensuring complete visibility and control of cash flow. This is a fully automated and integrated solution that feeds back into Hanson’s ERP for auto-reconciliation. The cost-effective solution leverages Hanson’s existing procure-to-pay process and accounts payable system to deliver strong bottom line financial benefit vis-à-vis working capital and rebates.
Sophisticated payment analytics for strategic decision-making
With the 100% digital commercial cards solution, Hanson now has improved visibility into their accounts payable landscape to generate strategic insights. Analysing data over the past year, Hanson was able to identify opportunities for working capital optimisation, with projected financial returns. For example, Hanson identified card-accepting suppliers and implemented an automated Lodge Card facility with Citi to maximise card usage with these suppliers. This in turn allowed Hanson to generate a larger rebate and increase working capital returns.
Operational efficiency and improved supplier relationships
Hanson and Citi executed the market-first implementation in under eight weeks, with complete automation and ERP integration into Hanson’s existing infrastructure. The fast turnaround is testament to the feasibility of using commercial cards as the de-facto method for supplier payments as well as clear metrics for working capital. Hanson’s suppliers benefit from receiving a timely, seamless and transparent method of payment. In addition, both Hanson and their suppliers receive rich tax transaction data for all payments from Invapay. With auto reconciliation for Hanson, their suppliers and Citi, Hanson’s procurement team resources are freed up for higher value tasks.
Fotoulis concludes: “We have revolutionised the way we trade and manage supplier payments with a market-leading, automated commercial cards payment system, implemented in less than two months.”