In the first phase, the TReDS would facilitate the discounting of these factoring units by the financiers resulting in flow of funds to the MSME with final payment of the factoring unit being made by the buyer to the financier on due date. In case of reverse factoring, the buyer could also create factoring units based on the documents uploaded by the MSME seller. A brief illustrative outline of the minimum features required in the process flow is given in the Annex.

The actual business, technical and operational processes and procedures to be followed in the system will be prepared by the entity operating the TReDS, and will be part of the Procedural Guidelines for the system. Indemnity in favour of TReDS, if required, may also be given if it is made part of the standardized on-boarding process. There would be a one-time agreement drawn up amongst the participants in the TReDS:. This agreement should clearly capture the following aspects:. Alternatively, this aspect may be incorporated in the agreement between the MSME seller and the financier, to the effect that any financing transaction on TReDS will tantamount to an assignment of receivables in favour of whoever is the financier.

Other procedural aspects of TReDS functioning and operations may be incorporated either in the Master Agreement, if so necessitated by the participants, or in the Procedural Guidelines where applicable. In all instances, such procedural aspects, even if incorporated in the Master Agreements, should be in adherence to regulatory norms issued from time to time. The Master Agreement may also clearly indicate that any legal proceedings to be initiated by one entity against another, if at all, will be outside the purview of TReDS.

TReDS will also review the need for CERSAI registration for the assignments as indicated above, and put in place a suitable mechanism for the same preferably driven automatically through the TReDS , as soon as feasible after a factoring unit has been accepted for financing by a financier. Critical to the operations of the TReDS is the mechanism that ensures timely settlement of funds between the member financiers and the MSME sellers when the factoring unit is financed and the subsequent settlement of funds between the member buyers and the respective financiers on due date of the factoring unit.

In order to ensure a smooth process of such payments, the TReDS would be required to:. The TReDS will generate the settlement files and send the same to existing payment systems for actual payment of funds. Hence, the settlement process ensures payments to relevant recipients on due date, thus, facilitating the smooth operations on the TReDS. However, it would not entail a guaranteed settlement by the TReDS. The TReDS would be required to put in place a mechanism for bankers to report defaults in payments by buyers.

The TReDS would also need to ensure adequate arbitration and grievances redressal mechanism is in place.

It will function as an authorised payment system under the PSS Act The activities of the TReDS as well as those of the participants in the TReDS would be governed by the relevant legal and regulatory provisions applicable to various stakeholders in the system. Trade receivable exchanges such as M1xchange, are helping the MSME supplier get early payment against their invoices with minimum paperwork in just days. TReDS addresses the gaps in MSME industry as enterprises face challenges in getting their payments on time, thus creating working capital discrepancies.

The invoice is then verified and approved by the Corporate Buyer. This unique bidding mechanism gives the supplier an option to select the most suitable bid. The amount is later paid to the financier by the buyer on the mutually agreed terms.

Receivables finance • ING

Similar to the information sent or made available to the receivable owner, the clearinghouse 10 sends or makes available the receivable debtor 16 daily settlement reports. The report contains an itemized net payment due on its payables, net of any awards it is to collect if it is also a receivable owner 14 , and cash delivery failures on past settlements. The receivable debtor also sends information pertaining to the confirmation of settlement to confirm payments from the funds apparatus The clearinghouse makes available daily listings of invoices and information or receivable debtor obligations for those the receivable owner 14 had provided access to the financial provider These listings are categorized by receivable owner 14 , receivable debtor 16 , and any type of ownership interest guaranteed to the finance provider.

The listing by receivable owner is further defined by existing by type of clearinghouse terms , new additions, and changes to existing invoices. In an embodiment, information such as listings can be made available by the clearinghouse on a global basis by using, for example, the Internet. The financial provider 24 notifies the clearinghouse 10 of settlement deposit instructions, such as, payment instructions on receivable payments and loan payment instructions to the funds apparatus The financial provider 24 can access the clearinghouse marketplace 22 via a web page for trading receivables.

At the web page, the financial provider 24 can search for receivables to purchase, post offers to sell certain receivables, notify clearinghouse of offers and the acceptance of offers.

Primary Assertions

The financial provider 24 also receives a daily settlement report issued by the clearinghouse The clearinghouse 10 provides a daily report to the receivable debtor sponsor 20 and the receivable owner sponsor Both sponsors are provided information concerning discrepancies relating to the receivable owner or receivable debtor for which it sponsors. The receivable debtor sponsor is further provided with information concerning reconfirmation requests. The Internet based clearing center 10 creates an environment for account payable and receivable processes that significantly lowers traditional processing costs, and allows for more efficient and cost effective financing programs.

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Preferably, upon the receipt and initial processing of a purchase order manually or via Internet, ultimately , and shipping of the goods, the supplier 14 sends new invoice data to Rclearing. The invoice information is received by a data repository 26 and Rclearing. But in any case, all payments by the purchaser 16 are to be made to Rclearing.

In addition, within the electronic data the purchaser 16 may be given the option for a discount or extended payment terms, to confirm the exact dollar amount and date of payment, and waive all rights to additional adjustments or set-off. The size of the discount given by the supplier 14 to the purchaser 16 is negotiable, depending upon the dollar amount of the invoice, the date of payment, as well as the credit quality of the confirming entity if someone in addition to the purchaser 16 confirms the payment as well, i.

The purchaser 16 , individually or with a third party bank or insurance company , has the option of confirming the invoiced amount, and agreeing to the payment terms date and amount in order to receive the agreed upon discount or payment terms on the payment amount. Under this process, payments are less volatile, and cash receipts are easily segregated away from the supplier 14 , if necessary. A large or small company may join Rclearing.

The participant will access the Rclearing. All payments received on receivables electronic or via lockbox-prior to convincing payer that participation in Rclearing or electronic payments is more beneficial are through Rclearing. The payable is acknowledged, and possibly confirmed, by the participant to Rclearing. Upon availability of funds in the settlement apparatus 12 , Rclearing. Daily net settlements and reporting is done between the participants and Rclearing. Disclosure arrangements are predetermined between the funding participants and specific other participants.

Upon the request of the participant owning the receivable, confirmed and unconfirmed receivables may be offered by the receivable owner, or its receivable owner sponsor to financial participants 24 for funding prior to payment date via the receivable trading apparatus The funding scenarios are many.

How it works

A funding participant 24 may commit to another participant in the form of a loan or purchase arrangement, may purchase receivables as part of building or owning a portfolio of receivables, or may offer to purchase only discrete receivables, from time to time. All full participants may offer to buy discrete receivables using its sponsor through Rclearing. Standard legal documentation is preferably executed and binding upon any type of participant including funding participant 24 , supplier finance provider 18 , and purchaser finance provider 20 for all receivable sales or transfers, and funding arrangements, as a part of becoming a participant of the clearinghouse 10 both the customer and participating funding providers.

This, in itself, may reduce or eliminate significant legal costs for many funding arrangements. While the specific embodiment has been illustrated and described, numerous modifications come to mind without significantly departing from the spirit of the invention, and the scope of protection is only limited by the scope of the accompanying Claims. A method of utilizing a computer network based receivable clearinghouse for facilitating a transaction involving a receivable and corresponding invoice having payable and receivable information, the method comprising the steps of: receiving data comprising the invoice with the payable and the receivable information from a first participant involved in the transaction;.

The method of claim 1 further comprising providing a process for modifying the one or more payment terms, the steps comprising: receiving a confirmation offer from the first participant comprising an agreement on an amount and date; and,.

Trade receivables and revenue

The method of claim 2 further comprising the steps of: receiving a confirmation acceptance from the second participant in response to the confirmation offer from the first participant;. The method of claim 3 further comprising the steps of: receiving a reconfirmation acceptance comprising a guarantee of an obligation from a third participant, the third participant being a receivable debtor sponsor; and,.

The method of claim 3 further comprising the step of: transferring ownership and security interests of the receivable utilizing the receivable clearinghouse. The method of claim 1 further comprising providing a process for modifying the one or more payment terms, the steps comprising: receiving a confirmation offer from the second participant; and,. The method of claim 6 further comprising the steps of: receiving a confirmation acceptance from the first participant in response to the confirmation offer from the second participant;.

The method of claim 7 further comprising the step of: receiving a reconfirmation offer from a third participant, the third participant being a receivable debtor sponsor; and,. The method of claim 7 further comprising the step of: transferring ownership of the receivable utilizing the receivable clearinghouse. The method of claim 1 further comprising the steps of: facilitating negotiations between the first and second participants; and,.

The method of claim 1 further comprising the steps of: providing several types of participants for participating in the receivable clearinghouse; the types of participants include: receivable owner, receivable debtor, receivable owner sponsor, receivable debtor sponsor, and financial provider,. The method of claim 1 wherein the first participant being a receivable owner and the second participant being a receivable debtor.

The method of claim 1 wherein the invoice information received from the first participant comprises: an obligor;. The method of claim 1 wherein the one or more modifiable payment terms may be modified by the first or second participant. A method of utilizing a computer network based receivable clearinghouse for facilitating delivery of invoice information, reflecting a receivable, between a first party and a second party, the first party being a full participant of the receivable clearinghouse, the method comprising the steps of: receiving the invoice information from the full participant;.

The method of claim 15 further comprising the steps of: extending an offer to the full participant for soliciting funding for the invoice to a financial participant under clearinghouse rules and obligations agreed to by all participants. The method of claim 16 wherein the extending an offer to the full participant is a predetermined arrangement under clearinghouse rules and obligations agreed to by all participants.

The method of claim 16 wherein the extending an offer to the full participant is confidential. The method of claim 15 further comprising the steps of: generating a daily net settlement report wherein the full participant's payables and receivables are processed, including cross currency exchange mechanisms;. The method of claim 15 wherein the one or more modifiable payment terms may be modified by the first or second participant.

A computer network based receivable clearinghouse for facilitating a transaction involving a participant and an invoice, the invoice including payable and receivable information, the computer network based receivable clearing house comprising: a data repository for holding the invoice information submitted by the participant, the data repository being accessible to a financial institution of the participant under clearinghouse rules and obligations agreed to by all participants;.

The receivable clearinghouse of claim 21 wherein the participant is a receivable owner providing data on the receivable and being obligated to utilize the receivable clearinghouse to resolve the transaction. The receivable clearinghouse of claim 21 wherein the participant is a receivable debtor providing data on the payable and being obligated to utilize the receivable clearinghouse to resolve the transaction.

The receivable clearinghouse of claim 21 wherein the participant is a receivable owner sponsor being a representative of the receivable owner and being obligated to utilize the receivable clearinghouse to resolve the transaction on behalf of the receivable owner. The receivable clearinghouse of claim 21 wherein the participant is a receivable debtor sponsor being a representative of the receivable owner and being obligated to utilize the receivable clearinghouse to resolve the transaction on behalf of the receivable debtor.

USP true USB2 en. AUA en. WOA2 en. USB1 en. System and method for processing transactions using a multi-account transactions device. System and method for integrating trading operations including the generation, processing and tracking of and trade documents. Billing workflow system for crediting charges to entities creating derivatives exposure. Method and system configured for facilitating management of international trade receivables transactions. Method and system for providing bundled electronic payment and remittance advice.