Photo of David Reidy, Basware, Anna Bianchi, Celgene and Ritesh Jain, Citi.

This company operates in 34 countries worldwide. This is more than just a card solution; Citi and Basware developed a state-of-the-art solution that leverages e-invoicing and credit card networks to create an ecosystem that allows suppliers to be paid early, but does away with all issues encountered with a traditional physical card.

Physical card is obsolete with this solution

The challenge

Supplier payments was an area that was ripe for innovation – Celgene’s suppliers were increasingly requesting early or upfront payments. In order to meet these requests, Celgene was required to process payments immediately, thereby directly impacting its working capital position. The team at Celgene laid down the following objectives:

• Working capital optimisation:

  While early payment to suppliers was a business need, Celgene wanted a solution that would preserve or improve its working capital position. Early payments and working capital optimisation may seem like a dichotomy – but the team challenged themselves to achieve both these objectives simultaneously.

• Simple enrolment and management:

  The team at Celgene wanted to ensure that the early payment programme remained simple for suppliers to enrol without any complex legal documentation or technical integration. Similarly, it must also be simple for Celgene to manage.

• Frictionless experience:

  The payment processes at Celgene had been refined over many years. There was no room to introduce any inefficiency in the payment process. Therefore, it was essential that the new payment programme should be frictionless – from order-to-reconciliation – to allow for efficient and early payment to suppliers.

• Cost:

  It was paramount that the new payment programme should not increase costs for Celgene. Therefore, the early payment programme should not be expensive to build or run.

The solution

An overview of how the solution works:

1. Suppliers send electronic invoices through the Basware Network which becomes available to Celgene in real-time.
2. Celgene applies business rules to approve/reject invoices and allocate them to appropriate expense lines within Basware.
3. For every approved invoice, Basware sends a request to Citi to create a virtual card via an API.
4. Citi validates the request and creates a virtual card for that Invoice in real-time. This virtual card is a single-use card account with highly specific controls. Virtual Card details are sent back to Basware via an API message, again in real-time.
5. The card is automatically charged on behalf of suppliers in real-time, providing instantaneous confirmation. Suppliers receive funds directly in their bank accounts within two to three days without any further action from their side, along with rich remittance data.
6. A fully reconciled transaction file is generated and sent to Celgene’s ERP system to post accounting entries.
7. Celgene makes a single monthly payment to Citi to clear card outstanding.

Best practice and innovation

• Use of application programming interfaces (APIs).
• Payments no longer confined to ERP – this solution breaks that convention by plugging the payment channel into an e-invoicing platform. Fundamentally, this can have a profound impact for the entire industry as people start realising the benefit of initiating the payment where it creates best value and not necessarily through their ERP systems.
• Security and simplicity.