CEOs and CFOs are always looking for ways to improve cash flow and developing innovative invoice-based financing solutions and utilising an effective treasury management strategy is imperative in the current pressurised economic climate. Demica’s technology is used around the globe for just that purpose, running invoice-based transactions on its web-based Citadel platform.

Phillip Kerle, CEO, has driven Demica’s applications from strength to strength in the areas of securitisation, supply chain finance (SCF) and invoice discounting. Prior to joining Demica, Phillip served as a senior member of the executive management team at Demica’s US parent company, the J.M. Huber Corporation, and has 25 years of international business experience across Europe, Asia and the United States.

Demica regularly conducts research into the latest market trends and the types of asset based lending most suited to boosting cash flow. One of if its latest reports revealed substantial growth in the uptake of SCF solutions. Approximately 70 percent of European corporations reported that payment terms could be stretched no further yet, problematically, 55 percent of firms still sought to extend payment terms with their suppliers.

Tools such as SCF can help alleviate this pressure whereby a third party financier (usually a bank) pays suppliers immediately, whilst also extending buyer’s payment terms, effectively creating a win-win situation. Demica’s platform Citadel SCF streamlines the execution of such a solution through the complete automation of the financing process, bringing additional cash flow benefits to both buyers and suppliers and a simple, automated transaction management solution for financiers. A strong demand for this type of solution was evident, with 50 percent of European firms planning to monetise their receivables or utilise payables financing.

Demica’s recent research into another popular financing method, which surveyed over 1,500 European firms, revealed that the overall deterioration of asset quality over the past year and the current scarcity of credit is leading to a steady retrenchment to the robust asset category of trade receivables. Current use of finance leveraged against the security of trade receivables was revealed to be well past the pioneer stage, with some 36 percent of European companies reporting that they had already done so.

Furthermore, finance raised on this asset category was shown to be set to grow substantially over the next 12 to 18 months, with just under half of respondents planning to utilise the strategy. Demica’s Citadel ASP platform facilitates successful securitisation transactions for these firms by monitoring and reporting on the substantial volumes of trade receivables information required. Uptake of these solutions is expected to increase, as approximately 61 percent of businesses reported having no other choice but to offer asset categories such as trade receivables to convince banks to extend lines of credit.

Demica has also conducted extensive research within the factoring and invoice discounting markets. A report conducted in Northern Europe on this subject revealed that 62 percent of companies were using factoring services, predominantly motivated by access to non-bank finance rather than the need to outsource collections. A further 23 percent of respondents were principally looking to technology to deliver economies of scale and increased profitability. Demica’s Citadel ID solution is particularly suited to the industry, offering invoice discounting organisations the ability to generate additional revenue through business expansion and introduce greater risk management capability.

For further information visit http://www.demica.com or call Phillip Kerle on +44 (0) 20 7450 2500