Hanson AustraliaCombining Citi and Fintech Innovation to Extend Days Payable Outstanding

The ChallengeHanson is continually seeking to improve its working capital and drive operational efficiencies. The company was challenged to think ‘out-of-the-box’ and identified a strategic opportunity in procurement and accounts payable to extend days payable outstanding (DPO). Achieving this goal would increase Hanson’s cash flow while strengthening its relationships with suppliers by offering them early/ certainty of payment.

The SolutionHanson implemented an innovative commercial cards payment system for supplier payments. The system combines Citi’s Commercial Card solution with fintech start-up Invapay’s technology platform to pay suppliers that historically have not accepted credit cards and remove the need for suppliers to have a merchant facility.

“The B2B commercial card solution using the Invapay platform was first of its kind in Asia,” explains Jim Fotoulis, Commercial Manager Corporate at Hanson. “It enables us to obtain the extended payment terms of traditional card payments, while effecting automated, secure and efficient payments to non-card accepting suppliers, in any location across the world in any currency.”

The ResultProcurement and finance departments typically manage their operations according to established working practices. Hanson’s cost-effective solution leverages strategic partnerships with Citi and Invapay to

Case Study

Hanson is one of Australia’s leading suppliers of heavy building materials tothe construction industry and a global leader in aggregates.

digitally transform its accounts payable, covering its end-to-end supply chain with a fully automated solution that ensures a smooth payment process for suppliers. The use of commercial cards for B2B supplier payments is the first in Asia and in the construction industry.

The innovation delivered by Invapay’s platform brings significant benefits to both Hanson and its suppliers. Best practices introduced include:

• Automating supplier payments in less than two months

Hanson’s procurement team now use a Hanson card issued by Citi, with payments delivered to suppliers via the Invapay platform as electronic funds transfers (EFT). Invapay’s platform is multilingual, multi-currency, multi-tax and VAT/tax compliant, connecting Hanson with suppliers worldwide. Through Citi, the payment schedule (date/time) for approved suppliers is

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customizable, giving Hanson complete visibility and cash flow control. This fully automated and integrated solution feeds into Hanson’s ERP for auto-reconciliation. It leverages Hanson’s existing procure-to-pay process and accounts payable system to deliver strong financial benefits, including enhanced working capital and rebates.

• Sophisticated payment analytics for strategic decision-making

With a fully digital commercial cards solution, Hanson has improved visibility into accounts payable and can generate Strategic insights. Analyzing data over the past year, Hanson identified opportunities for working capital

optimization that offer financial returns. For example, Hanson identified card-accepting suppliers and implemented an automated Lodge Card facility with Citi to maximize card usage with these suppliers. This in turn allowed Hanson to generate a larger rebate and increase working capital returns.

• Operational efficiency and improved supplier relationships

Hanson and Citi executed the market-first implementation in under eight weeks, with complete automation and ERP integration into Hanson’s existing infrastructure. The fast turnaround demonstrates the feasibility of using commercial cards for supplier

payments as well as the clear working capital benefits available. Hanson’s suppliers benefit from receiving a timely, seamless and transparent method of payment. In addition, both Hanson and its suppliers receive rich tax transaction data for all payments from Invapay. With auto reconciliation for Hanson, its suppliers and Citi, Hanson’s procurement team resources are freed up for higher value tasks. “We have revolutionized the way we trade and manage supplier payments with a market-leading, automated commercial cards payment system, implemented in less than two months,” says Fotoulis.

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