Supply chain finance

Supply chain finance commonly uses a buyer's confirmation of an invoice to make early payment available to its supplier, potentially at a rate reflecting the buyer's credit quality. The buyer, supplier and financier have different costs, cash-flow effects and obligations. It can support supplier liquidity and manage payment timing, but creates dependence on the facility and requires transparent assessment of obligations and risk. It is not simply ordinary trade credit under every accounting framework; reporting classification and disclosures require separate analysis of the facts and applicable standards.