In late July, J.P. Morgan Payments announced a new supply chain finance solution integrated with cloud-based ERP software from Oracle.
The companies have worked with transportation, e-commerce and business services provider FedEx to create a new feature that enabled FedEx to configure natively in the system instead of having to implement a custom solution, reducing a typical six month development project to a simple activation and set-up process.
When FedEx approves an invoice, the vendor can choose to wait for payment on extended terms or receive early payment through J.P. Morgan Payments at financing rates based on FedEx’s high credit rating.
The integration capabilities of J.P. Morgan’s supply chain finance platform and Oracle Cloud Financials enabled FedEx to develop a customised solution tailored specifically to the company’s needs, ensuring a seamless implementation and faster activation, explains Trampas Gunter, CVP Corporate Development and Treasurer at FedEx.
“We did not previously have a supply chain finance solution in place in the US,” he says. “Implementing this solution optimises our working capital and offers vendors the benefit of early payment options. Collaborating with J.P. Morgan Payments and Oracle to build a solution has been transformative for our working capital management.”
The benefits to FedEx in terms of improved liquidity management include the ability to better align payment terms with the cash conversion cycle while providing suppliers with flexible financing options. According to Gunter, this enhanced liquidity management has strengthened the company’s financial position and operational resilience, ultimately benefiting both customers and shareholders.
“This supply chain finance solution supports suppliers’ financial health by providing access to early payment of invoices,” he adds. “This helps them better manage their cash flow and maintain steady operations, which in turn contributes to a more reliable supply chain.”
FedEx has also implemented a liquidity management strategy leveraging liquidity and account solutions from J.P. Morgan Payments and Kinexys by J.P. Morgan’s blockchain solutions, leveraging digital payments to enhance liquidity management across notional pools in Europe and Asia Pacific.
Kinexys allows corporate treasury departments to transfer funds between J.P. Morgan branches at any time – day or night – in dollars, euros or pounds. Additionally, it offers enhanced control to the treasurer as the payments can be programmed.
The transportation, e-commerce and business services provider is also implementing blockchain payments alongside J.P. Morgan’s notional pooling service, which allows group subsidiaries to access free overdrafts as long as another subsidiary maintains a corresponding positive bank balance – all without necessitating actual balance transfers between the entities.
J.P. Morgan Payments and Oracle have a longstanding relationship focused on integrating the former’s treasury and trade solutions within the latter’s ERP platform. Since 2022, dozens of corporate clients have used the technology to automate processes and improve end-to-end connectivity.
