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4 DECEMBER 2015


Xelix-paul

PAUL ROITER

Managing Director


We are re-inventing how early settlement is implemented and facilitated between buyers and suppliers.

The Xelix solution - Early Settlement Discount - a win for buyers and suppliers alike (part 2)

At Xelix we believe that a mutually beneficial solution to inefficiencies in the supply chain lies in Early Settlement Discount - where buyers are incentivised to pay their supplier invoices much earlier, in return for small discounts.

For buyers, early settlement discount represents a fantastic way to deliver meaningful yield on excess cash.

  • For example, paying an invoice 30 days earlier for a 0.5% discount, equates to a 6% APR, roughly a 30x superior return versus a business savings account.
  • Best of all this strategy carries ZERO risk - these invoices need paying anyway.
  • These savings reduce a company’s cost of sales, increase gross profit and filter straight down to EBITDA.
  • What’s more, investing in early settlement is a way to provide robustness and security to the supply chain, which is crucial to the health of any buying organisation.

For suppliers, early settlement discount provides the option of immediate cash flow as and when it is required.

  • Early settlement is typically offered at the same rate (or lower) as a bank or third party funder.
  • This form of financing is dead simple. A supplier does not have to deal with the hassle and liabilities of setting up a third party financing arrangement.
  • Accepting an early settlement payment is “off-balance sheet” meaning that the supplier is not taking on additional debt.

Theory is one thing, but we know from first-hand experience that Early Settlement Discount can be extremely burdensome to manage and, where used, is typically only offered to a handful of suppliers.

We have built Xelix to change that…

  • By breaking down and automating each stage of the process, we allow buyers to offer early settlement across their whole supply chain, whether that’s 30 suppliers or 3000 suppliers, with no additional resource. We help unlock the savings opportunity in the “long tail”.
  • Unlike traditional 2/10 net 30 “static” discounts (expire on day 10), our system calculates “dynamic” discounts based upon when the early payment will be made, at any point during the payment term.
  • Best of all, we have designed a system that can be up and running within days - with no requirement to integrate into IT and accounting systems and no change to a company’s invoice or payment processes. We remove complication, not add it in.

At Xelix, we are re-inventing how early settlement is implemented and facilitated between buyers and suppliers. We are a team of highly motivated finance professionals and technologists who see huge potential in the application of our technology for companies of all sizes. It’s time to bring early settlement discount into the 21st century!

If you believe that your organisation could benefit from working with us, we would love to hear from you.




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