It’s easy: Decide on the amount you have available for immediate payment of approved invoices. Determine approved invoices eligible to participate in the auction. Send information on approved invoices to InvoiceAuction. Tell InvoiceAuction what the minimum bid shall be and when the auction shall start. Let InvoiceAuction invite eligible Suppliers, let it display to each Supplier the relevant invoice information, let it collect and review bids and transfer the info on winning bids to the Buyer. The Buyer then pays the winning bids’ invoices according to their terms. See, that was easy.
InvoiceAuction creates a competitive trading environment for discount offers, thereby enabling Buyers to invest excess cash to get discounts which are more valuable than interest earned on bank accounts or via investments in short-term-securities. InvoiceAuction allows the implementation of a tailor-made discount policy, calibrated to the actual needs of the members of Supply Chain. Adopting InvoiceAuction transforms approved invoices into an investment opportunity for the Buyer, thereby incentivizing it to accelerate the invoice approval process internally.
InvoiceAuction charges a small implementation fee and a success fee to Buyers for its Platform services. The success fee will be paid out of discounts generated through an auction run by it on behalf of a buyer. For a tool with minimal up-front investment, InvoiceAuction gives a very rapid return on investment. Consider this: A Buyer accepts a bid for a 1% discount for early payment of an approved invoice—say, paying a 30-day- invoice after 10 days. Then, instead of earning interest on the cash held in an account, it is “invested” for 20 days to get a 1 % return. A brief calculation shows that this would amount to the equivalent of an 18% annual return on capital.