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Supply Chain Finance (SCF) is a short-term working capital finance that can be availed by dealers or suppliers having good business relationships with enterprises to optimize working capital requirements. It is a process in which an enterprise gets its supplier’s payments financed by an external financier. Supply Chain Finance is a mix of financial instruments like bill discounting and overdraft that focuses to optimize finance and flexibility for the customer. Table of Contents : • • • • • SCF is also defined as a set of business and financing practices that form the connections between various parties in a transaction – buyer, seller and financing institution – in order to lower financing costs and improve business efficiency. The Procedure followed in India • Supply Chain Finance is a financial agreement between buyer and supplier (financer) • Invoice of shipped or supplied goods or provided services is raised by the supplier for the buyer • Supplier sends the invoice to financer’s supply chain finance platform • Buyer approve the invoices on the same platform • Financer pays the supplier against the received invoice • Financer debit the amount from buyer’s account at the time of invoice maturity Example of Supply Chain Finance Let’s assume that ‘A’ buys goods from supplier ‘Z’. Y supplies the goods and sends the invoice to ‘A’. Then ‘A’ approves the payment on terms of 30, 60 or 90 days. If ‘Z’ requires payment before the defined time du...