Community Banking Case Study Series Part 3 – The New Classic

by | Apr 11, 2019 | Case Study, Community Banking, Series, Supply Chain Finance

In part 2 of our 5-part Community Bank series, we examined how an ArtisPay Supply Chain Finance program can make your Crown Jewel clients shine even brighter by equipping them with valuable cost savings and instrumental operational efficiencies. In part 3 of our series, we take a look at the economic drivers, your future Crown Jewels – the fast-growing small companies.

 

Client

Type: $5MM Revenue Company
Deposits: ~$200K
Annual Payable: Several Million
Line of Credit Facility: Yes

 

Client Overview & Needs

Client is growing – and growing fast. After several years of figuring out their product, they have achieved impressive, consistent year-over-year growth and are looking to their partners, particularly their banking or lending partner, for treasury management solutions to increase operational efficiency. While this company has not achieved the hallowed “hockey stick” growth, they are growing at a pace that demands attention to product development and customer service, not their A/P department. Common to most companies, particularly, growing companies, cost centers typically get overlooked. In the context of the current case, the company’s supply chain was under stress secondary to challenges related to invoice approval (avg. approval >30 days) – the company was bogged down with calls from their suppliers inquiring about payment status. The client also did not want to pay suppliers immediately. Working capital is a premium; and, in order to retain their cash, the company sought out low-cost financing sources.

 

Solution

ArtisPay Supply Chain Finance

 

How

Client had suppliers submit (supplier-centric) invoices electronically via ArtisPay, with required attachments including PO’s and a copy of the invoice. In order to incentivize participation, the client informed suppliers that by submitting invoices electronically via ArtisPay, suppliers would receive the following benefits:

  • Full visibility of their invoices & payment timeline
  • Ability to request early payment on any invoice at any time
  • Faster invoice approval

Pairing these benefits with simple supplier onboarding and registration processes led to exceptional participation by the client’s suppliers.

 

Results for Client

  • Reduced average invoice approval time by 83% (from > 30 days – to 5 days)
  • Significantly reduced vendor payment inquiry calls
  • More cash on balance sheet
  • Control over outgoing cash
  • Lower processing costs
  • Improved internal controls

 

Results for Bank

  • Very satisfied Client
  • Client retention – Client is excited to grow with their innovative bank partner
  • New fee income
  • Free advertising – the Client’s suppliers have asked the bank about offering this service to their other buyers

 

MORAL

With ArtisPay, banks nurture their fast-growing clients as they blossom into Crown Jewels. By equipping these clients with ArtisPay, banks provide these clients with strategic tools, at no cost, to significantly boost their A/P function and enhance their supplier relationships. These advantages serve to improve business all around – for banks, for clients and for suppliers – a classic trifecta with a new spin on how to secure the win – ArtisPay – The New Classic.