AP » The power of embedded credit in working capital

The power of embedded credit in working capital

The power of embedded credit in working capital

The optimisation of working capital remains a critical focus for treasury and finance teams.

Embedded credit solutions present a sophisticated approach to enhancing cash flow and operational efficiency.

These solutions leverage advanced technologies to streamline financial processes, reduce costs, and mitigate risks, positioning businesses for robust growth.

Streamlining Financial Processes

The integration of credit lines into payment platforms is a transformative innovation for managing accounts payable.

By embedding credit options within the financial ecosystem, companies can achieve significant cost savings and operational efficiencies.

This seamless integration allows businesses to manage cash flow with greater precision, reducing the friction traditionally associated with financing.

Numarqe has specifically designed its payables financing platform to address the working capital needs of corporate companies.

Anabas, a leading facilities management company, faced significant challenges in managing numerous transaction workflows and inefficient expense reconciliation processes. Manual tasks and multi-currency transactions added to their operational complexity. Partnering with Numarqe, Anabas implemented embedded credit solutions that streamlined their processes.

Key features like direct receipt uploads and multi-currency support drastically reduced manual tracking time and enhanced VAT recovery. The platform’s user-friendly interface further improved operational efficiency.

“Our partnership with this platform has transformed our facility management operations,” says Kerry Shotton from Anabas.

“The platform’s user-friendliness, efficient transaction management, and direct receipt uploads have saved us valuable time and resources. It’s a game-changer for our financial management.” – Anabas

Reducing Financing Costs

Embedded credit solutions reduce the cost of financing by optimising the use of credit lines.

Traditional financing often comes with high costs and inflexible credit limits and terms, which can strain a company’s cash flow. Numarqe’s solutions offer more flexible, cost-effective alternatives that align with the operational realities of businesses.

Efficient working capital management is essential in the current economic climate, characterised by high interest rates and persistent inflation. For instance, the global credit gap, particularly affecting SMEs, is estimated to be nearly $2 trillion.

Effective working capital management can help businesses navigate these challenges by generating additional free cash flow and optimising their capital structure?.

Proco Group, a global executive search firm, required an efficient financial management system to handle extensive operational expenses across its 100 professionals. Challenges included managing cash flow and reducing financing costs.

Numarqe’s embedded credit solutions offered Proco Group seamless integration within existing financial workflows, and powered their multi-currency transactions. Numarqe’s AI-driven credit engine can underwrite customised credit lines to align with Proco’s cash flow cycle. These features enhanced cash flow management and significantly reduced financing costs.

The streamlined financial processes allowed for better resource allocation and operational efficiency.  “The dashboard is incredibly intuitive for everyone, from the back office to our consultants ‘in the field’. They can capture receipts on their phone and attach it to the notification, while back here we can instantly see every transaction in real time: when, and where, and what it was for,” says Emma Holford from Proco.

“Now we have the ability to issue and set individual credit limits on virtual or physical cards with a single click. We can even create cards for a specific purpose. This has helped eliminate rogue spending and declines, while the system has slashed the amount of time we’re spending on managing cards, chasing receipts, and understanding our spend across the business.”

Enhancing Credit Availability through AI

One of the most compelling aspects of Numarqe’s offering is its AI-powered credit engine. This technology utilises a combination of financial, performance, and behavioural features and metrics to assess risk with unprecedented accuracy and speed.

Traditional credit assessment models often rely on outdated data and static metrics – focused purely on spending behaviour and past performance, resulting in conservative credit limits and slow decision-making processes. In contrast, Numarqe’s AI-driven approach can underwrite up to ten times more in credit limits, responding swiftly to the dynamic needs of businesses.

The use of real-time data allows for more nuanced risk assessment, enabling Numarqe to tailor credit solutions to the specific requirements of each client. This approach not only enhances credit availability but also ensures that financing is aligned with the client’s actual risk profile, reducing the likelihood of financial distress.

A Fintech Innovator in Payables Finance

Numarqe adopts a holistic approach to working capital management. Built around the needs of CFOs and finance teams, Numarqe was inspired by the real-life experiences and challenges faced by CFOs who continually sought solutions to the daily pains of financial management.

As a fintech platform specialising in payables finance, Numarqe drops in and embeds its credit solutions within the client’s financial operations.

This level of integration provides a comprehensive view of working capital, encompassing all relevant asset and liability classes.

The ability to handle multi-entity onboarding, multi-currency transactions and comply with diverse regulatory requirements is particularly advantageous for businesses with global operations. Numarqe’s platform facilitates seamless international transactions, reducing the complexities associated with cross-border financial management.

So why embedded finance?

Navigating the complexities of modern financial management requires innovative solutions that enhance operational efficiency and cash flow.

By integrating multi-currency credit lines into payment software platforms, leveraging AI to fuel risk management and power underwriting, and specialising in payables finance is unique. Numarqe helps businesses streamline processes, reduce costs, reduce time and mitigate risks.

Key Takeaways:

  1. Streamline Financial Processes: Embedding credit lines into your payment systems can significantly reduce friction in accounts payable, saving time and enhancing precision in cash flow management.
  2. Reduce Financing Costs: Transitioning from traditional financing to Numarqe’s flexible, cost-effective credit solutions can lower your overall financing expenses and improve resource allocation.
  3. Enhance Credit Availability: Utilise AI-powered underwriting to access higher credit limits and tailored financial solutions, enabling better risk management and faster decision-making.
  4. Global Financial Operations: Leverage multi-entity onboarding, multi-currency transaction capabilities and ensure compliance with diverse regulatory requirements, simplifying international financial management.

For actionable insights and detailed case studies on how businesses like Anabas and Proco Group have successfully utilised these strategies, explore more at Numarqe Insights.

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