FAQ (Buyer)

Program Benefits

Supply Chain Finance program benefits include enhance working capital, improve your supplier’s financial strength, maintain or extend your Days Payables Outstanding (DPO), earn interest or invoice-discount income and access to an alternate source of financing (liquidity).

When you are using bank facility you have to pay the interest for the payments made to your suppliers. With SCF Program, the interest is paid by the suppliers for the early payment they received from you, by way of invoice discounting or interest on receivable purchased. In fact, you can earn treasury income on the funding made to the suppliers. (We can share with you the estimated program income work-out).
Suppliers who have enrolled find the program financially advantageous, especially where payment is received early so that they have working capital to pay their suppliers and (or) buy raw materials.

Program Challenges

Company’s wide buy-in is crucial. Full support and cooperation from key divisions mainly CFO/Finance, Acc Payables, Procurement and IT dept. Secondly, the funding sources must be adequate to support the program entirely. Thirdly, Buyer’s creditworthiness and financial performance for the Funder(s) comfort. Lastly, the provider competency and platform capability. Firstly, must obtain Senior Management esp. the CEO/Board visible support to drive the program. Company can set up a working committee comprise the respective department heads to align priorities working towards one common goal, such as treasury income. Provision the right size of reserves as well as having flexible funding structures for the program. Buyer reports strong financials and maintain good governance, audit and compliance are key elements. Lastly, using a proven and tested platform adopting automation, seamless to use and can scale up transactional volume with no limit.
Your solid financial performance and good credit standing enable the SCF Program to be funded by Bank or Non-bank institution. We can assist to obtain the funds (subject to the approval and terms and conditions of the funding institution and other associated fees to be charged).

Program Enrollment

To start the planning process, Buyer needs to sign the Letter of Engagement and NDA. Afterwards, to provide the Supplier Data Form. Upon we complete the planning stage, additional documents may include the Implementation Form and relevant legal documentations.
Upon receipt of the Supplier Data incl. payment details and quantitative information, we will configure the back-end and front-end of the platform and do system perimeter setting as per the Business Requirement Document (BRD). Then internal testing and UAT will be conducted subsequently. Afterwards platform training when the program is complete and ready to go live. Upon implementation intensive support through dedicated support desk through-out the program
There is one-time set up cost for the system and fixed monthly subscription fees for operating the platform. The set-up period will approximately in 45 to 60 days. However, we offer an optional scheme for us to absorb the set-up cost and the monthly subscription fees, however to be substituted by your placement of a one-off refundable security deposit with lock-in period for at least 36 months.
When roll out the program we have to spend the cost of set up and system configurations as well as pay the fixed annual licensing fees to the System IP and clouds. We need the Buyer to commit through-out the program tenure of 60 months as we have already locked with the System IP for 5 years. We view that 36-month period would be a reasonable period to recoup the set-up cost and licensing fees from the program. We projected the treasury income from the program will be able to recoup the deposit in the first year.
Default Discounting mode is when a supplier wants all invoices submitted are for discounting. Suppliers has the convenience of receiving early payment for all invoices Buyer submits to the SCF platform (once approved). Selective Discounting requires suppliers to access the SCF platform in order to select individual invoices for which they want to be paid early (discount). If the invoices are selected and subsequently approved by you the payment will be made within 3 working days business day. If they decided not to select, no early payment will be made to the invoice.
Buyer can choose to have only Selective Discounting mode. However, it may not go well with the objective of the program i.e. to provide consistent liquidity and certainty to the suppliers. It is best to have the program in two modes i.e. Default and Selective mainly for the suppliers to opt. More suppliers use the invoice discounting transactions would generate more treasury revenue for the Buyer and makes the program more sustainable.
The Funder may decide the security arrangement for the funding facility including also other terms and conditions of the funding facility.
Hyperclick Atlas is a platform operator, responsible to set up, operate and maintain the SCF program. Hyperclick also acts as the intermediary to all parties in the program. In addition, Hyperclick will conduct promotion activities jointly with the Buyer as well as provide training to the suppliers.
We will communicate with your suppliers during and after the on-boarding stage, to provide support and address their questions. We may also make in-person meeting with your major suppliers. We do host interactive webinars and demo for group of suppliers to highlight the objectives and benefits of the program as well as provide basic training. Our client services team also make periodic calls to offer trouble-shooting support.
The program is structured to run at a minimum of 5 years. Should you decide to terminate the program in less than 36 months, the security deposit will be forfeited.

Discount Calculation

The discount charge is calculated by multiplying the invoice amount by the rate, where the rate includes the spread plus the Base Rate. This number is multiplied by the number of days from the date hyperclick purchases the invoice until the maturity date. This amount is then divided by 360 days.

Invoice x (BLR + Spread) x (Days Held by hyperclick /360days)

For example, the calculation on a RM10,000 invoice would be:

Assumptions:

  • Spread: 3.0% p.a.
  • Cost of Fund Rate: 6.00% p.a.
  • Service fee: 0.5%
  • Buyer (obligor) approves receivable on Day 5
  • Payment term is net 90 days
  • Supplier accelerates payment by 85 days

RM10,000 (6.0% + 3.0%) x (90 days -5 days) = RM212.50 discount charge 360

This discount charge is then deducted from the invoice and the Supplier receives funds on Day 5:

RM10,000 – RM212.50 – RM50.00 = RM9,737.50 paid to Supplier on Day 5

Required Documentation

To conduct the business performance assessment, being part of the initiation planning process, we need your historical financial information. We shall keep all information confidential as we agreed under the NDA document.
Some personal data is collected to satisfy ‘Anti-Money Laundering’ and ‘Know Your Customer’ requirements. It is used to verify your application during the approval process and filed securely. Your personal data will not be used for any other purpose.
We must have the original documentation to implement the program. As an option, you may email or fax the executed documentation t for a review of accuracy prior to mailing the hard copy originals. Early review provides the convenience of making any necessary corrections to the documents before sending the hard copy originals. This will ensure accuracy and save time with the enrollment process.

Payments

Payment to suppliers will be made by bank account via Electronic Fund Transfer. The payment arrangement will follow as stipulated in the SCF Program rules.
Only procurement for production materials under open account are suitable under the Program. However capital purchases such as equipment/machines usually under progress or mile stones payments are not suitable to be under the program.
If an invoice is not up-loaded as a confirmed receivable in the program, the invoice is not considered part of the Supply Chain program. As a result, disputes have to be settled outside the program and would be between you and Supplier directly.
Supplier is not responsible for a Buyer’s nonpayment due to credit reasons or other financial inability to pay. But there is recourse to the supplier in the event there is a breach of representation, warranty, covenant or the terms of the Receivables Purchase Agreement.
Once your organization decided to implement the SCF Program, you will be provided with Client_Buyer Service team contact information, telephone number and e-mail addresses. This information will be provided to you with a copy of the countersigned contracts. The team will responsible for all on-going support or inquiry.

For more information about hyperclick Supply Chain Finance Program, please contact us by sending an email to Gloria at client.service@hyperclick.com.my


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