Financing of your operations
Any company even if not involved in commodity trading relies on external capital provided by financial institutions to run its business. On top of financing purchase of goods and running costs, trading firms may also need additional capital to finance extra costs such as shipping, duties and freight insurance.
At SINGA, we have experience in such field and we can help you on setting up financing and optimizing incurred costs
At SINGA we have spent substantial time with trade finance teams, the main request being the implementation of the most efficient monitoring of goods movements since there is a big impact on the financing costs (under transactional trade finance scenario).
We have created different manners to follow the goods movements with the help of proper CTRM and processes, enabling the identification of the status of the goods (produced not yet shipped, shipped from the origin to the loading point or to a border crossing point, in stock at loading, shipped on a vessel, arrived and/or unloaded…). It helped us to suggest in an automated manner the modification of the trade finance limits, to inform the financing bank and to supply the necessary details to decrease the financing cost since the risk on the collateral used for financing was as well decreasing.
We called this process the Transferable Trade Finance Limits, it has helped Trade Finance team to decrease substantially the Financing Costs and to improve the team performance.
Another point related to trade finance has been the identification of the Financing Capacity, which incorporates new deals not yet produced, new stock and fresh payment instruments available for financing and obviously the impact of transferable limits. We have developed such solution for a Trade Finance team which helped in the planning of financing and which has been incorporated in the cash flow of the company.
We have helped as well in the due diligence process required by different banks in order to measure possible borrowing base implementation (necessary internal controls and proper processes in place, accurate reporting...)
Such deliveries would not be possible without the proper processes in place and the proper information system, at SINGA we understand the objectives of our customers and the goals their teams need to succeed. We take such challenges as an opportunity of growing our knowledge and a great opportunity to add value to our customers.
We have implemented different tools to manage many types of banking instruments through banking channels, such as standard import and export letters of credit, standby LCs, first demand bank guarantees, advance payment guarantees, cash against documents.
We have added value to our customers by optimizing the confirmation costs negotiation for a letter of credit and by reducing the time for cash collection.
We have achieved this, first by managing the negotiation process with a system integrating confirmations received from banks and as well Letter of Credit’s offers and then generating a set of statistics linked to this function.
Then, by creating an efficient and logical operative dashboard, showing work to be performed and alerts in relation to pending files (such as latest shipment date within 2 weeks but no shipment planned, L/C opened but not yet cleaned/confirmed, amendments not received, expiry date coming soon,…), the operations team could manage its files in a proactive manner, defines work priorities, focus on emergencies and overall, presents documents with the less possible mistakes and discrepancies. On top, we have placed alerts along the operational process in order to mitigate related risks and created a routine reporting integrating hierarchical view of issues.
Finally, we have created a scorecard system to manage the workload of the operations team which goal was to dispatch in the most efficient manner the volume of work and avoid discrepancies in the L/C presentations. We have achieved this task and have helped the management in the evaluation of performance process. This scorecard system has been since used in the Key Performance Indicators of the team members.
Based on the understanding of the global process, we have been assigned the design of the operational process taking into consideration the shared services and outsourcing capacity the customer had in place. We have successfully delivered an updated operational model design which incorporated different locations and remote management.
We have followed possible automation of the operations and interfacing possibilities, such as STSA Traffec®, BOLERO®, eLCY® and we keep interested in such opportunities to improve the banking instruments management.
Financing Fees Optimization