AU2006200832A1 - System and method for receivables management - Google Patents

Description

AUSTRALIA

Patents Act 1990 THE WCM GROUP LTD COMPLETE SPECIFICATION STANDARD PATENT Invention Title.

System and method for receivables management The following statement is a full description of this invention including the best method of performing it known to us:r- Cross-Reference to Related Applications SThe present application claims priority from Australian Provisional Patent S2005904118 filed on 1 August 2005, the content of which is incorporated herein by N, reference.

C Technical Field 00 The present invention relates to improved management of receivables owed by customers to a corporate.

IN-

Background Art C Upon issuing an invoice, many companies allow customers a period in which to provide remittance, such a period typically being of the order of weeks or months.

During the period of time commencing when the corporate performs work on behalf of the client and issues an invoice for the work, and concluding when the customer finally provides remittance for the invoice, the customer is in debt to the corporate. From the perspective of the corporate, during this period of time they are acting as a lender to the customer. Surveys suggest this period of time is on average around 7 weeks, an extensive period of time in which the working capital of the company is unavailable.

During usual operations of the company, a large number of customers typically owe the company receivables at any given time. The total amount of receivables owed to the company can be significant, to the extent that customer delays in providing remittance can have significant effects on the cash flow and even the ongoing viability of the business.

Further, in many companies, accounts receivables departments responsible for management of such debts owed to the company constitute a significant portion of the total staff and operating cost of the company.

Securitisation is one technique which can be used in such situations.

Securitisation involves the company selling their receivables to a securitization vehicle, and in return receiving funds equal to some percentage of their net receivables. The cash flow implication of securitisation is that the company receives funds only upon sales of receivables, which usually occurs monthly. Nevertheless, monthly receipt of such funds often represents an improvement in cash flow to the company. However, a loss reserve must be maintained. Cash generation is not possible for debtors held in the loss reserve. In the event of a bad debt, the financial institution has recourse to the loss reserve. Should the company wish to enter into a negative pledge arrangement, permission must be obtained from the lenders.

m:\specifications\500000\504000\504170cmpwtm.doc (N Further, securitisation usually operates with reference to specific customer Sparameters and size limitations, in that a large number of debtors are required, smaller Sreceivable values are preferred, and usually no single debtor may account for more than N, a given threshold of sold receivables, for instance a threshold of 5% of total sold receivables.

C Further, in Australia it is understood that many securitisation transactions 00 undertaken by corporates will be required to be included on balance sheet. The terms Sand conditions of securitisations vary widely however the key features which may lead ,1to a securitisation being on balance sheet include: the corporate typically provides a reserving component which covers some amount of bad debts for the trust should a N receivable default; where the corporate continues to administer the loan, cash flows are typically not transferred to the trust without material delay and are not invested in cash or cash equivalents until passed on (for example, on many receivables purchase arrangements capital repayments are reinvested in new receivables balances, not passed through to the trust as a capital repayment).

Securitisation also fails to ameliorate the burden of administering receivables.

All receipts and default collection must continue to be managed by the company itself.

Moreover, securitisation imposes additional administrative tasks, including a monthly assessment of the eligibility of each debtor according to stringent criteria, and the requirement to produce monthly notices such as a determination statement, a sale notice, and a default monitoring notice. Securitisation does not provide debtor management reporting to the company.

Any discussion of documents, acts, materials, devices, articles or the like which has been included in the present specification is solely for the purpose of providing a context for the present invention. It is not to be taken as an admission that any or all of these matters form part of the prior art base or were common general knowledge in the field relevant to the present invention as it existed before the priority date of each claim of this application.

Throughout this specification the word "comprise", or variations such as "comprises" or "comprising", will be understood to imply the inclusion of a stated element, integer or step, or group of elements, integers or steps, but not the exclusion of any other element, integer or step, or group of elements, integers or steps.

Summary of the Invention According to a first aspect, the present invention provides a method for managing receivables on behalf of a first party, the method comprising: m:\specifications\500000\504000\5041 7cmpwtm.doc (1,I receiving from the first party details of a receivable owed to the first party by a Ssecond party; T instructing a financial institution of the first party to forward funds to the first N party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; instructing the second party to remit the receivable to the financial institution; ¢€3 00 and taking out credit insurance upon at least a portion of the receivable.

N According to a second aspect the present invention provides a system for managing receivables on behalf of a first party, the system comprising: I means for receiving from the first party details of a receivable owed to the first party by a second party; means for instructing a financial institution of the first party to forward funds to the first party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; means for instructing the second party to remit the receivable to the financial institution; and means for taking out credit insurance upon at least a portion of the receivable.

The present invention thus provides for the first party to receive funds in respect of the receivable prior to remittance of the receivable by the second party, and so improving cash flow for the first party.

According to a third aspect the present invention provides a computer program for managing receivables on behalf of a first party, the computer program comprising: code for receiving from the first party details of a receivable owed to the first party by a second party; code for instructing a financial institution of the first party to forward funds to the first party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; code for instructing the second party to remit the receivable to the financial institution; and code for taking out credit insurance upon at least a portion of the receivable.

The present invention thus provides for the first party to receive funds in respect of the receivable prior to remittance of the receivable by the second party, and so improving cash flow for the first party.

In preferred embodiments of the invention, credit insurance is taken out in respect of 100% of the value of the receivable. The provision of 100% credit insurance m:\specifications\500000\504000\5041 7Ocmpwtm.doc O in respect of the receivable may avoid any requirement for provision of a loss reserve.

SFurthermore, the provision of credit insurance in respect of the receivable preferably Sgives no recourse against the first party in the event of the receivable becoming a bad ,IC debt. Such embodiments ensure that the first party carries no ongoing risk in the event of the receivable becoming a bad debt. Not only is this circumstance of itself desirable for the first party, but further, under the Australian Equivalent International Financial 00 Reporting Standards (A-IFRS) such an arrangement may allow the first party to remove Sthe receivable from their balance sheet before the receivable is remitted by the second Sparty.

Preferably, funds forwarded to the first party from the financial institution ,IC corresponding to the remittance owed by the second party are equal to 100% of the net sales of the first party, the net sales being made up of a plurality of receivables, less refunds, rebates, discounts and the like. Further, the present invention admits of automated implementation, thus enabling extremely prompt transfer of funds to the first party in respect of the receivable, for example on the next business day after the receivable comes into existence. Such embodiments provide for the first party to receive 100% payment in respect of the receivable owed by the second party, and potentially many days or weeks before the second party remits that receivable.

Further, by merely requiring a financial institution to act upon instructions to transfer funds, for instance as may be effected by a funds transfer request (FTR) file, and to subsequently receive remittance from the second party, the present invention avoids any need for complex infrastructure development on the part of the financial institution. Instead, the financial institution need merely, for example, operate a funding account on behalf of the first party, and operate a payment receipts account into which the second party is instructed to deposit their remittance.

Moreover, by receiving details of one or more receivables (and preferably substantially all receivables) of the first party, the present invention provides for outsourcing of accounts receivables functions of the first party, thus allowing the first party to substantially reduce accounts receivable management overheads.

In contrast to previous vehicles such as securitisation, by providing a receivables management system and method in which receivables are credit insured and funds transferred to the first party, the present invention better matches the debtor spread of most companies, as the invention can be implemented for a smaller number of debtors, and further in respect of larger individual receivable values. Further, in preferred embodiments of the invention, no limit on the largest debtor size need be applied.

m:\specifications\500000\504000\504l 7cmpwtm.doc In preferred embodiments, the present invention may make no adverse impact Supon the ability of the first party to enter into a negative pledge arrangement.

In further embodiments of the invention, invoices and/or monthly statements CI may be issued on behalf of the first party upon or after receiving details of the receivable owed by the second party. Such embodiments are particularly advantageous C as such invoices may be branded in accordance with the requirements of the first party, 00 and may further include remittance instructions to the second party to remit funds to the 0financial institution. Further, embodiments of the system and method of the present i invention preferably ensure that such invoices impose industry standard trading terms.

Preferred embodiments of the invention further provide reporting functions C enabling the first party to monitor their accounts, statements, and historical spend with a service provider of the present invention. For example such reporting functions may be provided by establishing an internet report accessible to the first party.

Further embodiments of the invention preferably provide for a credit limit to be applied to the first party, and further provide for monitoring of a credit status of the first party in respect of that credit limit.

In preferred embodiments of the invention, the second party is subject to an approval process prior to any undertaking to manage receivables owed by the second party in accordance with the present invention. In preferred embodiments, the first party may have approved customers managed in accordance with the present invention and may also elect to undertake their own receivables management in respect of customers who fail to gain approval under the approval process.

The present invention further provides for provision of sophisticated receivable management reporting functions to the first party. Such management reporting functions are amenable to automation and may thus provide the first party with internet accessible 'live' reports. For example, the present invention may provide for receivable management reporting functions such as an aged trial balance, an account daily balance, a report of credit limits assigned, reports of total payments and funding, default reports, default of at least 10 days reports, and pending transactions reports.

Further embodiments of the invention may additionally operate loyalty programs to reward the first party for using an embodiment the present invention to manage their receivables.

Brief Description of the Drawings Examples of the invention will now be described with reference to the accompanying drawings in which: m:\specifications\500000\504000\504170cmpwtm.doc Figure 1 is a schematic of a system for receivables management in accordance Swith an embodiment of the present invention; SFigure 2 is a time line of one aspect of the operation of the system of Figure 1; Figure 3 illustrates the credit approval process of the system of Figure 1; Figure 4 is a timeline of default reporting in the system of Figure 1; and CI Figure 5 is a diagrammatic representation of the transactions and liabilities of 00 the system of Figure 1.

Detailed Description of the Preferred Embodiments An embodiment of the present invention is illustrated in Figure 1. System 100 Ci comprises a corporate 110 and a customer 120. Interactions between the corporate 110 and customer 120 include the customer 120 ordering products or services at 121 from the corporate 110, and the corporate delivering at 111 the ordered products and/or services together with a corresponding invoice to the customer 120.

The system 100 further includes a central gateway 130. The corporate 110 generates a daily activity file (DAF) and at 112 delivers the DAF to the central gateway 130. The DAF includes details of the invoice forward to the customer 120 at 111. The central gateway 130 interacts at 141 with an insurance provider 140 to secure credit authorisation in respect of the customer 120.

In the event that credit authorisation is secured in respect of customer 120, the central gateway 130 forwards at 131 a funds transfer request (FTR) file to a bank 150.

The bank 150 operates a funding account 152 in respect of corporate 110. In response to the FTR, the bank undertakes a daily transfer 153 of funds from the funding account 152 to the corporate 110. The bank 150 also reports to the central gateway 130 by sending at 156 a daily funds transmission report (FTR) and a payment activity file (PAF) to the central gateway 130. Consequently, the central gateway is able to monitor a funding status of the corporate 110.

The central gateway 130 generates a monthly billing statement in respect of the customer 120, and at 132 forwards the monthly billing statement to the customer 120.

The central gateway 130 is also operable to generate a monthly activity report on behalf of the corporate 110, and at 133 forwards the monthly activity report to the corporate 110.

At 122, the customer is required to make monthly payment into the payment receipts account 154 operated by the bank 150 in respect of the corporate 110.

As part of the system 100, the corporate 110 is further required to pay the bank 150 a monthly receivables management fee (RMF), at 113.

m:\specifications\500000\504000\504170cmpwtm.doc (1,I Thus, the system 100 provides for the administration of the receivables of the corporate 110. Notably, in the system 100, 100% of the amount invoiced at 111 is Sremitted at 153 to the corporate the next working day by the bank 150. Accordingly, NI the corporate 110 is provided with vastly more rapid access to working capital which may otherwise be unavailable for many weeks. That working capital is then available I to be used by the corporate 110 to further their interests, whether by way of capital 00 acquisition, share buy back, shareholder returns, or otherwise.

Further, the system 100 does not require the corporate to implement changes to "1the existing invoicing processes used, and is thus simple for the corporate to adopt.

Automated and professional billing processes may also serve to assist customer relations of the corporate 110. Provision of monthly management reports by the gateway 130 to the corporate 110 further provides the corporate with valuable management data.

Figure 2 is a time line 200 of one aspect of the operation of the system of Figure 1. Portion 210 of timeline 200 represents a first month, while portion 220 of timeline 200 represents the next succeeding month. During month 210, the corporate 110 issues invoices in the manner set out in Figure 1, and on the following business day receives from the bank 150 100% payment of each invoice issued, as indicated by daily payment times 212.

At the end of the month 210, the central gateway 130 issues the or each customer 120 of the corporate 110 a monthly statement, at monthly billing time 222.

Although originating from the central gateway 130, the monthly statement is preferably generated in accordance with branding parameters of the corporate 110. Customer payment is due on the 30th day after the statement is issued, at time 224. Thus, in the average month the customer 120 is provided with a minimum of 30 days and a maximum of 60 days in which to provide payment in respect of invoices issued by the corporate 110 during month 210. In the preferred embodiment, this period is interest free to the customer 120. Despite this average 45 day payment period afforded to the customer 120, the corporate 110 receives funds daily in respect of invoices issued the preceding day. Longer payment periods (not shown) may be afforded to one or more customers of the corporate 110, for example an 'extended terms' (ET) customer may be afforded a 90 day interest free period in which to provide payment. Thus, such embodiments provide the corporate 110 with flexibility in determining business rules and workflows.

Figure 3 illustrates the credit approval process 300 of the system 100 of Figure 1. At 312, the corporate 110 seeks approval for customer 120, by providing the m:\specifications\500000\504000\504170cmpwtm.doc (1,I customer name, Australian Company Number (ACN) or equivalent, if applicable, and Sthe desired credit limit in respect of the customer 110. The insurance provider 140 Sapplies credit approval requirements and, should customer 120 meet those NI requirements, credit approval is provided at 314 by insurance provider 140 to the corporate 110 in respect of customer 120.

Subsequently, when daily activity files are forwarded 112 by the corporate 110 00 to the central gateway 130, the central gateway 130 performs automated checking to Sdetermine whether the customer demographic information contained in the DAF match ,Ithat of customers approved by the insurance provider 140. For those portions of the data which do correctly match, the DAF can be processed and a FTR forwarded at 331 NI to the bank 150, in respect of those portions. However, should there not be a match between one or more items of customer demographic information contained in the DAF and that of customers approved by the insurance provider 140, an error notification report is generated by gateway 130 and forwarded at 141 to the insurance provider 140 to validate and/or update the data or take other remedial action. The transactions in respect of such mis-matching data are withheld from the FTR forwarded at 331.

At 341, the insurance provider 140 provides the central gateway 130 with updated validated data as appropriate. Insofar as that updated data resolves the mismatches between the data of the DAF received at 112 and the updated approval data stored by the central gateway 130, a supplementary FTR is forwarded at 332 to the bank 150 in respect of the thus resolved transactions.

Central gateway 130 further monitors a credit limit approved by insurance provider 140 in respect of each customer of the corporate 110. Upon receiving the DAF at 112, the central gateway determines whether any transaction contained in the DAF would cause any customer to exceed their respective credit limit. If so, such transactions are withheld from the FTR files forwarded at 331 and 332, and held 'pending'. Once the customer in question provides payment in respect of past receivables to the bank 150 to sufficiently reduce the customer's credit balance, and the bank 150 informs the central gateway 130 of that payment (by way of PAF 156 set out in Figure the central gateway 130 then processes the pending transaction for inclusion in a FTR to be sent to the bank 150.

The credit insurance provider 140 further undertakes corporate credit establishment. This involves setting a funding facility limit (FFL), which is determined in cooperation between the corporate 110, credit provider 150 and credit insurer 140.

For example, where an expected monthly spend is $50M, then the FFL may be calculated to be 2.4 x $50M $120M, to allow for the spend in months 1 and 2 with m:\specifications\500000\504000\504170cmpwtm.doc payment for month 1 due at the end of month 2. The insurance provider 140 also Sassigns a discretionary limit (DL) for the Corporate. The corporate 110 may approve new customers or amend existing customer's credit limits up to the DL, for example by use of an internet portal to the insurance provider's records for the corporate. Above the DL, the corporate 110 must contact the insurance provider 140 for approval.

I The credit approval process 300 further involves data cleansing of the records of 00 the corporate 110, to ensure that customer names match the Australian Security and SInvestment Commission (ASIC) records including A.C.N. prior to commencement. On 'qsubsequent iterations, only those data portions which have not previously been authenticated, such as data of new customers or changes in the data of old customers, IC are subject to data cleansing for this purpose, in order to reduce the data processing burden and cost of such data cleansing.

Figure 4 is a timeline 400 of default reporting in the system 100 of Figure 1. In timeline 400, period 410 represents a first month, period 420 represents a second successive month and period 430 represents a third successive month. At time 422 a customer statement is issued in respect of invoices issued to the customer 120 during month 410. A payment due date occurs at time 424 on the 30th day after issuance of the monthly statement. Immediately after the due date 424 and in the event of default, a first default report is generated by gateway 130 at time 426 and sent to corporate 110.

While in the present embodiment corporate 110 is not financially affected by the default, it is to be expected that the corporate 110 has a motivation to resolve the payment default in order to avoid the ongoing relationship with the customer 120 being soured by initiation of debt collection procedures. However, should payment remain outstanding 10 days after due date 424, a "default 10" report is generated by gateway 130 at time 428 and forwarded to the credit insurance provider and/or insurance broker to initiate debt collection procedures. While a 10 day period is implemented in the present instance, this period is configurable and may differ in alternate embodiments or for alternate corporates or customers.

In the event that debt collection procedures against a defaulting customer 120 are unsuccessful, the provision of credit insurance in accordance with the present invention ensures the corporate 120 has no exposure to recovery procedures in respect of the bad debt. Instead, the bank 150 has recourse to the credit insurance provider 140 for resolution of the bad debt.

In this regard, Figure 5 is a diagrammatic representation 500 of the transactions and liabilities of the system 100 of Figure 1. At 510 is indicated a financial asset of the corporate 110, being a receivable from the customer 120. In accordance with operation m:\specifications\500000\504000\5041 7cmpwtm.doc N-I of the system 100 of the present invention, the financial asset 510 is derecognised at 512 by provision of a financial asset 514, namely funds from bank 150. At 516 is Sindicated any ongoing service obligation to customer 120. Such a service obligation N 516 could for example include provision for product returns or provision to honour a product warranty.

C Customer 120 has a financial liability 520 payable to the corporate 110. The e¢3 00 financial liability is facilitated at 522 by way of a credit account 524 with bank 150.

Thus, bank 150 has a financial asset 550 in that the debt of customer 524 is payable to \the bank 150, as indicated at 526. Importantly, as indicated by 518, the financial asset of the receivable payable by the customer 120 has been transferred from the corporate N 110 to the bank 150, and has been derecognised 512 by the corporate 110. Contingent financial liability 540 is borne by the credit insurance provider 140 and bad debt recovery 542 involves interaction between the bank 150 and the credit insurance provider 140.

Unlike securitisation, the transferral of the receivable from the corporate 110 to the bank 150 enables the receivable to be derecognised and removed from the balance sheet of the corporate 110, to the extent that credit insurance is implemented. This improves financial ratios of the corporate 110, and can lead to favourable analyst reviews of the corporate 110. Further, the system 100 provides for substantially reduced receivables management overheads for the corporate 110, and further eliminates the exposure of the corporate to bad debt, to the extent insured. Accordingly 100% credit insurance of receivables is preferable in the present invention. It is to be noted that in such instances the corporate may still be responsible for payment of any excess when such an insurance payment is made. Accordingly, the present embodiment provides for bank level security against fraud.

Additionally, as the present invention does not alter existing banking relationships of the corporate 110, the present invention should not impact the ability of the corporate to enter negative pledge arrangements.

It is anticipated that the corporate 110 will be charged, for example by way of a monthly fee, for the services provided by the central gateway 130. That fee may be payable by the corporate 110 to the bank 150, with the bank distributing relevant portions to the central gateway provider and other third party provider 140 as appropriate.

Embodiments of the present invention may further be particularly suited to implementation of a loyalty rewards program in conjunction with the receivables management program of the present invention. Such a program may be designed to m:\specifications\500000\504000\504170cmpwtm.doc

C

I reward customers for their loyalty, generate increased spend, provide the corporate 110 with a unique marketing advantage, build bigger market share through increased sales Sto existing and new customers, reduce customer chum, reward customers for loyalty, (I and be a cost effective way to market the companies' products/services.

It will be appreciated by persons skilled in the art that numerous variations C and/or modifications may be made to the invention as shown in the specific 00 embodiments without departing from the spirit or scope of the invention as broadly described. The present embodiments are, therefore, to be considered in all respects as N illustrative and not restrictive.

(N-

m:\specifications\500000\504000\5041 7Ocmpwtm.doc

Claims (39)

1. A method for managing receivables on behalf of a first party, the method comprising: receiving from the first party details of a receivable owed to the first party by a second party; instructing a financial institution of the first party to forward funds to the first ¢€3 00 party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; Sinstructing the second party to remit the receivable to the financial institution; and taking out credit insurance upon at least a portion of the receivable.

2. The method of claim 1 wherein credit insurance is taken out in respect of 100% of the value of the receivable.

3. The method of claim 1 or claim 2 wherein funds forwarded to the first party from the financial institution corresponding to the remittance owed by the second party are equal to 100% of the net sales of the first party.

4. The method of any one of claims 1 to 3 wherein transfer of funds to the first party in respect of the receivable occurs on the next business day after the receivable comes into existence.

5. The method of any one of claims 1 to 4 wherein instructing the financial institution is effected by a funds transfer request (FTR) file.

6. The method of any one of claims 1 to 5 wherein the financial institution forwards funds to the first party from a funding account of the first party.

7. The method of any one of claims 1 to 6 wherein the financial institution operates a payment receipts account into which the second party is instructed to deposit their remittance.

8. The method of any one of claims 1 to 7 further comprising issuing on behalf of the first party invoices and/or monthly statements, upon or after receiving details of the receivable owed by the second party.

9. The method of any one of claims 1 to 8 further comprising providing reporting functionality to the first party.

The method of any one of claims 1 to 9 further providing for a credit limit to be applied to the first party, and providing for monitoring of a credit status of the first party in respect of that credit limit. m:\specifications\500000\504000\5041 7Ocmpwtm.doc

11. The method of any one of claims 1 to 10 wherein the second party is subject to San approval process prior to any undertaking to manage receivables owed by the second party. N

12. The method of any one of claims 1 to 11 further comprising operating loyalty programs to reward the first party. i

13. A system for managing receivables on behalf of a first party, the system 00 comprising: means for receiving from the first party details of a receivable owed to the first N party by a second party; means for instructing a financial institution of the first party to forward funds to N the first party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; means for instructing the second party to remit the receivable to the financial institution; and means for taking out credit insurance upon at least a portion of the receivable.

14. The system of claim 13 wherein credit insurance is taken out in respect of 100% of the value of the receivable.

The system of claim 13 or claim 14 wherein funds forwarded to the first party from the financial institution corresponding to the remittance owed by the second party are equal to 100% of the net sales of the first party.

16. The system of any one of claims 13 to 15 wherein transfer of funds to the first party in respect of the receivable occurs on the next business day after the receivable comes into existence.

17. The system of any one of claims 13 to 16 wherein instructing the financial institution is effected by a funds transfer request (FTR) file.

18. The system of any one of claims 13 to 17 wherein the financial institution forwards funds to the first party from a funding account of the first party.

19. The system of any one of claims 13 to 18 wherein the financial institution operates a payment receipts account into which the second party is instructed to deposit their remittance.

The system of any one of claims 13 to 19 further comprising means for issuing on behalf of the first party invoices and/or monthly statements, upon or after receiving details of the receivable owed by the second party.

21. The system of any one of claims 13 to 20 further comprising means for providing reporting functionality to the first party. m:\specifications\500000\504000\5041 7Ocmpwtm.doc C

22. The system of any one of claims 13 to 21 further providing for a credit limit to Sbe applied to the first party, and providing for monitoring of a credit status of the first party in respect of that credit limit. NI

23. The system of any one of claims 13 to 22 wherein the second party is subject to an approval process prior to any undertaking to manage receivables owed by the second party. 00

24. The system of any one of claims 13 to 23 further comprising means for operating loyalty programs to reward the first party.

25. A computer program for managing receivables on behalf of a first party, the computer program comprising: ,IC code for receiving from the first party details of a receivable owed to the first party by a second party; code for instructing a financial institution of the first party to forward funds to the first party corresponding to the receivable owed by the second party, prior to the second party remitting the receivable; code for instructing the second party to remit the receivable to the financial institution; and code for taking out credit insurance upon at least a portion of the receivable.

26. The computer program of claim 25 wherein credit insurance is taken out in respect of 100% of the value of the receivable.

27. The computer program of claim 25 or claim 26 wherein funds forwarded to the first party from the financial institution corresponding to the remittance owed by the second party are equal to 100% of the net sales of the first party.

28. The computer program of any one of claims 25 to 27 wherein transfer of funds to the first party in respect of the receivable occurs on the next business day after the receivable comes into existence.

29. The computer program of any one of claims 25 to 28 wherein instructing the financial institution is effected by a funds transfer request (FTR) file.

The computer program of any one of claims 25 to 29 wherein the financial institution forwards funds to the first party from a funding account of the first party.

31. The computer program of any one of claims 25 to 30 wherein the financial institution operates a payment receipts account into which the second party is instructed to deposit their remittance.

32. The computer program of any one of claims 25 to 31 further comprising code for issuing on behalf of the first party invoices and/or monthly statements, upon or after receiving details of the receivable owed by the second party. m:\specifications\500000\504000\504170cmpwtm.doc C(N

33. The computer program of any one of claims 25 to 32 further comprising code Sfor providing reporting functionality to the first party.

34. The computer program of any one of claims 25 to 33 further comprising code Ni for applying a credit limit to the first party, and code for monitoring of a credit status of the first party in respect of that credit limit. The computer program of any one of claims 25 to 34 wherein the second party 00 is subject to an approval process prior to any undertaking to manage receivables owed by the second party.

N

36. The computer program of any one of claims 25 to 35 further comprising code INO for operating loyalty programs to reward the first party. C

37. A method for managing receivables substantially as herein described and with reference to the accompanying drawings.

38. A system for managing receivables substantially as herein described and with reference to the accompanying drawings.

39. A computer program for managing receivables substantially as herein described and with reference to the accompanying drawings. Dated this twenty third day of February 2006 The WCM Group Ltd Patent Attorneys for the Applicant: F B RICE CO m:\specifications\500000\504000\5041 7cmpwtm.doc