Knowing What SCF IS: How It Works And Its Profits For Buyers And Supplys

Illustration of SCF in business (Unsplash/Sebastian Hermann)

YOGYAKARTA - Supply Chain Financing (SCF) is a term that often appears in the business or company world.

SCF is a method that business owners often rely on in developing their business or business. However, there are still many who do not understand what SCF is.

Entrepreneurs need to take advantage of SCF to improve the company's progress and be able to compete with business competitors. SCF is included in a strategy to optimize sales in an era of fast and high market needs. How does SCF work and its benefits for business people?

Supply Chain Financing (SCF) is working capital financing to business owners by buying stock of goods from suppliers. This step is taken by business people to develop their business in terms of providing goods and sales.

Through the SCF method, business people can reduce their costs or business funding. The existence of technology that can connect various parties in one transaction is able to minimize business expenditure costs. There are three main actors who are generally involved in SCF, namely buyers, suppliers, and financial institutions providing SCF services.

SCF can also help businesses run more efficiently in terms of time, energy, and cost. SCF makes it easier for borrowers to receive payments faster without having to provide full guarantees.

SCF is actually a form of cooperation or partnership between various parties through the provision of short-term credit. The credit provided aims to provide working capital for both suppliers or sellers and buyers. The chain of client supply is another consideration in SCF.

This partnership program not only optimizes working capital and business cash flow, but also has a major impact on business liquidity. SCF facilitates companies (purifiers) to extend payment requirements to suppliers. While suppliers do not need to worry about cash flow. The supplier will receive the payment early.

How does the process work? When using the SCF method, suppliers can sell their invoices or invoices to financial providers or banks. With this system, suppliers can have access to money more quickly and easily.

The ease of access to money will help suppliers maintain smooth running and the balance of cash flow they have. That way business activities can also operate smoothly.

Meanwhile, from the buyer's point of view, there will be many opportunities to pay the bills that must be paid. Buyers can also be calmer in carrying out various financial activities. SCF provides a win-win solution to both parties, namely buyers and suppliers.

A number of SCF profits can be felt by buyers and suppliers. Here are some benefits obtained by the two parties who entered into partnerships.

SCF's Profits for Investigators

SCF's Profits for netizens

After knowing the SCF's understanding and the work process, then you need to know the tips or how to choose the right Supply Chain Financing for your business. You need to choose a company or financial institution that provides the SCF according to your business needs.

Various banks are competing to provide SCF services that are profitable for both sellers and buyers. One of the important considerations in choosing SCF is the interest rate applied to each financial institution that provides it.

That is the explanation of what SCF is, how it works, and its various benefits for buyers and suppliers. SCF is very helpful for business people in reducing operating costs and is useful for improving business development.

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