TZ – ORION Instant payment11. December 2014
Brno, December 9, 2014 – 68% of small and medium-sized enterprises gets paid for their receivables later than required by the statutory deadline of 30 days – yet, most pay for their liabilities in a significantly shorter term. Oftentimes, this results in a lack of financial resources for further development and day-to-day operations because the classical financing through bank factoring remains inaccessible to them due to a number of fixed and rigorous conditions. A simple solution to this problem is offered by ORION Instant Payment service, which allows to recover missing payments from overdue invoices almost immediately, through a system of investment auctions and by using EDI – electronic data interchange. Recently, ORION Instant Payment was newly introduced in the centre of the Czech National Bank.
An extensive research of more than 5,000 companies with an annual turnover of CZK 1 - 100 million, carried out by a company called Investment Auction – a partner of ORION Instant Payment and the licensee of the Czech National Bank for the provision of payment services – revealed that 53% of small and medium-sized enterprises pay their liabilities in less than 30 days. This puts them in a difficult situation, when they are waiting for payments from large customers, but need funds quickly to pay out wages and purchase essential material. The solution is operational financing with the help of ORION Instant Payments from CCV Information Systems, which enables businesses to receive 75% of the receivable amount almost immediately and the remaining 25% upon payment by the customer.
In doing so, factoring, i.e. financing of short-term loans provided upon provision of goods or services, has a great future potential in the Czech Republic. It is currently used to pre-finance only about 3% of invoices; compared to almost 14% in the United Kingdom. CCV Information Systems, through provision of EDI services, aim to remedy this situation, as confirmed by David Reichel, director of eBusiness CCV Information Systems: ‘ORION Instant Payment is a completely new complementary service of ORION EDI solution. It relies on the fact that our consolidation centre ORION transfers more than two million documents to thousands of trading counterparties every month. After activating the service, it is only required to click on a particular receivable and then secure appropriate funding even a few months earlier, which may be absolutely crucial, for example, for further growth of a young and dynamic company. In the significant majority of cases, such firms are not able to make use of the classic bank factoring due to a number of barriers and restrictions.’
Quick and easy payments, using the advantages of EDI
ORION Instant Payment provides ORION EDI customers with a simple and efficient way of financing commercial receivables in just a few seconds – simply by selecting one or more business cases in ORION EDI, for which they want to obtain financial advance before the maturity of the invoice. By just one click, customers can specify the invoices, for which they want to receive 75% of value to their account in less than three days.
Without restrictions and unnecessary administration
All concerns of those interested in pre-financing are resolved by clicking on a relevant invoice. Requested money is quickly transferred to an account and the consolidation centre ORION ensures complete issuing, transmission, electronic signature and reliable archiving of all relevant documents. Moreover, unlike conventional factoring, ORION Instant payment includes no contractual conditions for the realization of receivable (for instance from the point of view of a minimum turnover or number of customers), and related administration is reduced to a minimum. It is a matter of course that the service activation is completely free and no other payments are required as it would be the case with the banking institutions.
- Video showing how service ORION Instant payment works can be found here: youtu.be/xHO0oQu5Y1I;