The system, called Clareti Payables Financing, CPF, is designed to solve the opposing needs of buyers and suppliers, with buyers wanting to hold on to their cash for as long as possible and suppliers who want payment as fast as possible.
Gresham said that by using buyers’ credit ratings and working with a global bank and supply chain experts, it is able to assist in unlocking working capital and can provide greater transparency of the physical and financial supply chain.
In this way, a supplier would know well before the event that a customer has approved payment at a date in the future and could, if short of cash, press a pay me now button to get a discounted payment from their bank, which would know the money was to arrive at a future date.
Gresham has set the infrastructure in place with a with a leading Asia Pacific telecommunications company that it said operates an existing supply chain portal, and what it described as a major global bank.
Gresham will derive revenue on a transaction basis. We expect this deal to build in the short term to then deliver a material impact on our future earnings over the next few years, it said. It is leaving the participants in the deal to reveal their involvement in due course.
Gresham was a small software company with a poor financial record until in 2003 it announced its Clareti Cash Reporting Service to assist banks by providing a single consolidated view of their positions in each currency, including bank account and transaction information, in real time.
It said in the 12 months to June 30, the value of transactions it monitored grew by 90% to in excess of $500bn per day on average, and it has increased the number of providers to 24.
Gearing up for the new business is expensive and Gresham said it expects to report a loss before tax of 1.5m pounds ($3m) on revenue of 6.4m pounds ($12.9m). It said that given the strength of its existing pipeline, it will begin to reap the rewards of the investment program during the second half of 2007.
