A fine tool to manage supplier liquidity

Transcription

1 Supply Chain Finance A fine tool to manage supplier liquidity

2 Siemens Supply Chain Finance Extending Account Payable term helps Siemens manage its cash conversion ratio. At the same time, Siemens understands this will put pressure on supplier s cash flow and is willing to help. Siemens Supply Chain Finance offers the opportunity for our suppliers to discount their AR with bank at a very favorable interest rate. The discounting rate is in line with Siemens own credit rating. Supplier can better manage their liquidity with this tool. Bank Supply Chain Finance Programm supplier Durch Siemens Finanzstärke profitieren -Powered by Orbian- Page 2

3 Supply Chain Finance online process 1. Supplier delivers and issues invoices supplier 6. Siemens pays invoice amount and financing bank further distributes Financing bank SCF platform Supply Chain Finance Program LeveragingSiemens Financial Strength -Powered by Orbian- 5. Financing bank pays discounted amount Page 3

4 Features of online SCF Discounting rate Citibank: PBOC 6 month lending rate down 10% / _.html advantages: 1. Supplier doesn t need to open account 2. Supplier can easily check its AR online 3. Citibank offers manual discounting and auto discounting options Page 4

5 Supplier discounting sample AP info bank pays 13 AP supplier uploaded supplier the created in ticks AP for to SCF discounted SAP discounting platform amount Siemens pays bank AP amount: RMB 100,000 Invoice receipt date: due date: Discounting rate: 5.04% per annum Discounting interest paid: 100,000 X 5.04% X 55* / 360 = 770 Supplier gets paid of RMB 99,230. * From to is 55 days in total. Page 5

6 Requirement of SCF Payment term shall be changed to the first 15 th day after xx days after receipt of invoice if it s a holiday, then the first working day thereafter Payment term coding in Siemens SAP: A days after receipt of invoice to 15 th of month A days after receipt of invoice to 15 th of month A days after receipt of invoice to 15 th of month A days after receipt of invoice to 15 th of month A days after receipt of invoice to 15 th of month A days after receipt of invoice to 15 th of month e.g.: Invoice receipt date: Mar 1, 2014, payment term coding is A980, then the payment due date is April 15, Page 6

7 Supplier access process and documentation requirements Access process: Siemens sends recommendation to Citibank Citibank contact supplier and complete documentation Citibank sends a blanket AR transfer notice to Siemens Siemens sends formal recommendation to Citibank Citibank completes e-banking setup Siemens completes SAT setup. Supplier documentation with Citibank: Business license Tax registration certificate Organization ID card Organization credit certificate Legal representative s ID card or passport Company s name (Chinese and English) confirmation Company size confirmation CitiConnect e-banking documents Supplier discount agreement Page 7

8 Supply Chain Finance team (China) contact info Li Xiaoyong Head Finance advisory and structuring Project & Structure finance Siemens Ltd., China No. 7, Wangjing Zhonghuan Nanlu, Beijing Xiaoyong.li@siemens.com Xu Siyao Treasury executive Siemens Ltd., China No. 500, Dalian Road, Yangpu District, Shanghai Siyao.xu@siemens.com Page 8