WO2003042877A1

WO2003042877A1 - An accelerated invoice to payment trading method for participating enterprises

Info

Publication number: WO2003042877A1
Application number: PCT/AU2002/001551
Authority: WO
Inventors: Barry John Mostyn
Original assignee: Interkey Technologies Pty Ltd
Priority date: 2001-11-14
Filing date: 2002-11-14
Publication date: 2003-05-22
Also published as: AUPR886101A0

Abstract

An accelerated invoice to payment trading method for participating enterprises is controlled via an Independent Bureau which authorises a Financier to forward payment of a Supplier's Invoice within an agreed present payment period and to collect payment from a Customer within a predetermined delay. The Supplier pays a variable fee to the Independent Bureau dependent on the preset payment period and/or the predetermined delay.

Description

TITLE: AN ACCELERATED INVOICE TO PAYMENT TRADING

METHOD FOR PARTICIPATING ENTERPRISES BACKGROUND OF THE INVENTION

1. Field of the Invention THIS INVENTION relates to an accelerated invoice to payment trading method for participating enterprises and computing system therefore.

2. Prior Art

Trading transactions between enterprises such as the supply of goods and/or services in return for payment often commence with the supply of goods and/or services and conclude with the payment for those goods and/or services. Many such transactions are not concluded until the end of an accounting period or later, such as when the receiving enterprise is prepared to accept the goods and/or sen/ices, or after the paperwork has gone through conventional channels for timely attention, such as at the end of an accounting period.

The delay between delivery of goods and/or services and payment creates a need for accounting personnel to monitor accumulating transactions. Another very significant cost to business is that incurred through late receipt of monies, which may have been expended in producing the goods and/or services. A further significant cost to business is the resolution of disputes and claims including pricing, credits, returns and supply variances. The vast number of people involved in these processes significantly contributes to the cost of doing business.

The advent of computerised accounting systems which are employed by most business has not had any significant effect on this delayed receipt of payment for goods and/or services delivered. Typically, the default accounting period of computerised accounting systems is generally set to thirty days. Many invoices and statements are not despatched to the Customer until month end, nor paid until the end of the following month.

Furthermore, as each business is entitled to utilise any desired accounting system, including computerised systems, at present there is no practical way of remotely collecting credit data from independent enterprises which will provide a real and independent measure of a company's credit or trading performance. Thus, credit bureaus and the like provide credit reports on enterprises based on reported, historic and publicly available information.

In business today, one of the main objectives to ensure success is to maintain a strong and constant cash flow. With increased raw material and operational costs, added taxation requirements (including Goods and Services Tax and the like) and recessing economies, the tendency is for accounts to be paid more slowly, with Supplier's invoices remaining outstanding for longer periods, eg. from 60 -120 days, which can create a negative cash flow effect for the Supplier. One way that businesses try to handle the cash flow problem is to obtain an overdraft from the bank as a stopgap measure until lagging accounts are paid. This form of facility is a very common practice in business today. Overdraft financing can be quite expensive and usually involves the business requiring a good credit rating, a mortgage over property, and usually a long-term relationship with the bank, before being able to access an overdraft facility. An overdraft, and mortgage(s), puts at risk the complete business and usually the Director(s)/Owner(s) personal assets, including property such as the family home. A further way businesses (i.e., individuals/entities) attempt to alleviate the problem of cash flow is by "factoring". This is a process whereby a bank, or factoring company, is assigned or takes a charge over the outstanding invoices from the business and advances a percentage of the invoice value. In many instances, the bank, or factoring company, then takes on the responsibility for debtor administration and collections, and pays the balance of the invoice (less a service fee) when the accounting payment is received. Neither the factoring company nor the Supplier has complete control over the timing of payments made by the customer and generally, there is no reduction of the debt. Another way that businesses try to alleviate the problem of cash flow is by "invoicing discounting". Invoice discounting is similar to factoring, whereby funding is again advanced against a percentage of the outstanding invoices, and preferably, the business maintains responsibility for its own debt administration and collections. Again, the bank, or factoring company, then pays the balance of the invoice (less a service fee) when the accounting payment is received. This way serves to protect the Customer from the possibility of heavy-handed debt collection methods, which may be employed by some entities, and which often leads to the loss of Customers who may also be suffering temporary cash flow problems. A major problem with factoring and invoice discounting is that the payment made by the bank, or factoring company, is a discounted amount and therefore does not match, or reconcile, with the invoice of the Supplier. This creates more work, and usually more accounting staff, to collate and reconcile the accounts, and is a disincentive for business to use the factoring, or invoice discounting processes.

Businesses that are unable to establish overdrafts are generally forced to take up factoring or invoice discounting due to the unavailability of alternative systems. Importantly, the available factoring and invoice discounting models, including computerised accounting systems, do not have the ability to vary, reduce or wind-in the overall outstanding debt of the Customer.

SUMMARY OF THE INVENTION

This invention aims to facilitate and/or increase the efficiency of trading between participating enterprises by accelerating the invoice to payment process and reduce the level of debt.

It is an object of the present invention to provide a trading method, and system, which enables the Supplier to receive a non- discounted, full payment of an invoice for goods supplied/services rendered within a pre-agreed time limit.

It is a preferred object to provide a trading method, and system, which enables a Supplier and/or Independent Bureau to agree and remotely vary the Customers' deferred payment period, which enables a Customer to defer payment of the invoiced amount for a period agreed by the Supplier to the Customer.

It is a further preferred object to provide a trading method, and system, where the Supplier can assess the Customer's credit status and worthiness before accepting an order and before supplying the goods/rendering the service.

It is a still further preferred object to provide a trading method, and system, where the Supplier agrees to pay to an Independent Bureau, which administers the system, an agreed fee, which is preferably variable, for early settlement of an invoice by a Financier or Independent Bureau against deferred receipt of funds by the Financier or Independent Bureau from the Customer.

It is a still further preferred object to provide a trading method, and system, where all transactions are monitored and dispute reporting and resolution between the Supplier and Customer can be affected. It is a still further preferred object to provide a trading method, and system, where all transactions are monitored and all payment defaults, short- or underpayments, or other payment variances are recorded for each Customer to establish a real time account performance monitor and reporting database. It is a still further preferred object to provide a trading method, and system, to create a GIN (Global Identification Number) for each client and Customer to form part of a global referencing network and database. The GIN may serve as a common identifier between enterprises when assessing and evaluating the trading and payment performances for a selected Customer. The GIN may also be linked to a stored value card (smart card) which can be linked to a facility/account held by the financial institution/Independent Bureau/Service Provider etc, for payment of transactions (if so selected by the Customer as an option of the system). It is a still further preferred object to provide a trading method, and system, where all transactions are insured against non-payment by the Customer, as well as insolvency of the Supplier, thereby protecting the recourse action of the funds provider/Financier/Independent Bureau.

It is a still further preferred object to provide a trading method, and system that will provide an electronic reporting suite to deliver trading performance reporting including such options and examples as the number of disputes, pricing returns; pricing variances; credit requests, delivery statistics, purchasing patterns, market intelligence and the like.

Other preferred objects will become apparent from the following description.

The terms defined in the definitions below are to be given their definition meaning throughout the following specification unless otherwise specified or understood from their usage herein:

"Accounting period," means a period of time allowed for completion of a transaction such as by payment of an account rendered.

"Financier" means a trading bank, building society, credit union, any other financial institution or Independent Bureau providing funding or services for the method and able to transfer funds between nominated accounts of participating enterprises, the Independent Bureau, service provider and/or the financial institution.

"Insurer" means an insurance company that provides insurance against loss against each transaction through non-payment or insolvency by any participating party. "Independent Bureau" means a bureau that is functionally independent from any participating enterprise or financial institution.

"Invoice" means an invoice or any notification of payment due in return for the supply of goods and/or services.

"Participating enterprise" means a business enterprise that has contracted or has otherwise agreed to trade or transact in accordance with the invention with one or more other business enterprises or consumers, which are also participating enterprises.

"Service Provider" means any organisation that may supply/contract various types of services (eg. hardware, infrastructure etc) to the Independent Bureau to allow the method to be actioned/implemented/utilised.

"Supplier" means a participating enterprise that supplies goods and/or services to another participating enterprise, called a "Customer", pursuant to a transaction with that Customer. "Customer" means a participating enterprise that receives

goods and/or services from another participating enterprise, called a

"Supplier", pursuant to a transaction with that Supplier.

In a broad aspect the present invention resides in a trading

method between participating enterprises including: (a) providing an Independent Bureau capable of communicating electronically with participating enterprises, Insurers, service providers and Financiers;

(b) obtaining from each Customer requiring delivery/provision of goods and/or services, method agreement(s) and authorisation for payments to be made from their bank account or similar to the Financier or Independent Bureau, at a predetermined delay afterthe delivery/provision of the goods and/or services by a Supplier;

(c) obtaining from the Supplier, authorisation/agreement to set and/or vary the predetermined delay for the payment by the Customer to the

Financier or Independent Bureau, subject to a fee payable to the Independent Bureau by the Supplier in return for payment by the Financier of the full amount of the Supplier's invoice for the delivery/provision of the goods and/or services to the Customer, within a preset payment period; and (d) the Independent Bureau electronically advising the Financierto forward payment of the Supplier's invoice within the preset payment period, and to collect payment from the Customer within the predetermined delay.

Preferably, the Financier is also instructed by the Independent

Bureau to receive a predetermined fee and/or interest payment from the Customer and/or Supplier.

Preferably, the Independent Bureau causes and collects the fee via the Financier and/or Service Provider, which is preferably variable, from the Supplier when, an agreed predetermined time frame has elapsed (eg. 48 hours after the Supplier has been paid the value of the invoice) or immediately after the Financier receives payment from the Customer, to complete the transaction. This payment would also include any payment variations due to the scheduled payment not being received on the agreed variable due date or because of any default that may have occurred. Preferably, the variable fee will be set out in a rate schedule escalator, issued from time-to-time by the Independent Bureau, where the Supplier agrees to pay a higher fee and/or higher percentage of the invoiced price, to the Independent Bureau as the predetermined delay for payment by the Customer is increased (i.e., longer credit terms for the Customer) and/or a reduction or extension in the preset payment period (i.e., between delivery/provision and payment) to the Supplier. The variable fee may be raised where the Customer has a poor, or below standard, credit record.

Suitably the trading method further includes providing the Independent Bureau with a computer system which provides a software/hardware interface having the ability to communicate with multiple software/hardware protocols so that it may communicate electronically with the computer accounting systems of participating enterprises and Financiers having different computer systems or utilising different programs.

While it is not essential that the Independent Bureau's communication with each participating enterprise requiring receipt of goods and/or services be computerised, such form of communication is preferred. However, the electronic communication advising of receipt or authorisation of an invoice to the participating enterprises, which received the original invoice, could be by way of facsimile or data transmission, for example. If desired, the Independent Bureau may provide to participating enterprises that do not have suitable computerised systems, display or printout, a means for advising each invoice recipient of receipt of invoice by the Independent Bureau for the respective payment according to agreed periods.

The Independent Bureau may have a host program that can recognise the accounting package of participating enterprises, communicate with the various accounts packages through a network protocol, and convert received information to a standard format that the bureau can manipulate. Alternatively, the bureau may mirror the various accounts packages of the participating enterprises to facilitate communication between the bureau and the participating enterprises. The standard format may include a capacity for encryption to maintain security of data stored.

The communication may be encrypted and limited to one-way communication to enhance security of information kept in the computer files of the bureau and the computer files of the participating enterprises. Alternatively, the communication may be encrypted and two-way communication with appropriate access rights provided to suit the circumstances. Suitably, a disputes mechanism is established and may be monitored by the Independent Bureau and may be actioned by any of the participating enterprises such that it does not provide clearance for payments to be made where a dispute exists between the participating enterprises in respect of a particular transaction until the dispute has been resolved. Furthermore, it is preferred that should a party fail to transfer at the appropriate time an advised amount, that default be automatically notified to the Independent Bureau for relay to the participating enterprises for resolution. Such notifications reside in the Independent Bureau's computer as a historical record of each participating enterprise for inclusion in an independent credit report, which may be provided by the Independent Bureau to participating enterprises or other parties.

Furthermore, it is preferred that should a party fail to record a default, such performance also reside in the Independent Bureau's computer as a historical record of each participating enterprise for inclusion in an independent credit report which may be provided by the Independent Bureau to the participating enterprises.

The trading method also suitably includes providing the Independent Bureau with a computer system that maintains auditable records of all transactions processed by the Independent Bureau and accessing those auditable records to provide a credit report on a selected participating enterprise and to provide suitable auditable reports to Government bodies (such as the Australian Taxation Office).

A preferred option of the system is for the Independent Bureau to transmit the complete details of each of the invoiced amounts to the participating enterprise invoiced and suitably this is done within a set minimum turn around time such as twenty-four hours or as per an agreed frequency between the participating enterprise and the Independent Bureau.

This may not be essential in the provision of services (as opposed to goods) as the receipt of the original invoice or documentation from the Supplier may serve as sufficient notification of the invoice details to the invoice recipient who will be aware that the funds may automatically be deducted from his account following approval of the invoice by the Customer. BRIEF DESCRIPTION OF THE PREFERRED EMBODIMENT

To enable the invention to be fully understood, a preferred embodiment will now be described with reference to the accompanying flowchart (FIG. 1).

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

It is assumed that all agreements, trading, operational or other, between the Supplier (S), the Customer (C), the Independent Bureau (IB), the Financier (F), the Insurer (I) and associated third parties (including the Suppliers' Bank (SB) and Customers' Bank (CB)), or combination thereof, are established and in place. It is also assumed that all bureau program software applications are in place at each of the participating parties. Ideally, all of the Supplier's Customers should be party to the arrangement and sign the relevant agreements, ensuring that every invoice of the Supplier is issued through the system. Where decided by the Independent Bureau, the Supplier, the Financier and/or the Insurer, that a Customer is considered to be too high a credit risk based on recent payment performance, the Customer may be excluded from the arrangement.

At the time of the original agreement between the parties, the Supplier's in-house finance system is configured to allow the queuing of the invoice details in preparedness for transmission to the Independent Bureau. The variable due date is agreed between the Supplier and each of the Supplier's Customers, and is the date that the Financier/Independent Bureau debits the Customer's Bank account for the invoice amount, eg. 30 days from the invoice date. The initial variable due date is agreed by the Supplier and the Customer at the time of the original agreement and recorded in the account register held in the system.

STEP 1

Supplier / Customer account details are established and maintained on the Independent Bureau database.

Suppliers and Customers are responsible for providing the bureau with details of additions, alterations and deletions to ensure all data is current.

The Independent Bureau's system advises the authorised person of the Supplier and/or Customer of any effected updates/changes of account details held within the system.

An account register for each Supplier / Customer account is established and maintained on the system.

A credit limit (eg. a monetary limit per transaction and / or per period) is agreed by the Supplier and Customer and entered into the account register. The credit limit and current limit is referenced upon receipt of each invoice. Authorised personnel of the Supplier have real time access to the credit details held in the Independent Bureau's real time credit database

(by means of a Personnel Identification Number (PIN) or similar method) to assist in deciding whether or not to accept an order (e.g. if the Customer is making a large purchase).

Credit limits will be reviewed regularly by the Supplier and the Independent Bureau to reflect the current purchasing patterns and the Customer's ability to pay. At any time, the Supplier and the Customer can agree to change the credit limit from an agreed date. Credit limit updates/changes of the account register held on the system are advised to the authorised persons of the Supplier and/or the Customer.

At any time the Supplier and the Customer can agree to change the variable due date (up or down) from an agreed date. Additionally, the Supplier and the Customer can agree to change the variable due date solely for a particular invoice or invoices. The Independent Bureau confirms with the Supplier if a change in the variable date alters the fee payable, (as per the Rate Schedule Escalator), updates the account register with the change, and the system advises the authorised persons of the Supplier and the Customer of the change. The Supplier and the Customer may also agree to periodically reduce the vaπable due date, in effect reducing the overall trading terms to ultimately become interactive transactions (eg. by reducing the variable due date by one or several days each agreed period). A formula is set into the account register, automatically updating the variable due date. The system advises the authorised persons of the Supplier and the Customer of the change at the next data transmission.

An invoice response date is agreed between the Supplier and the Customer and is the date by which the Customer must acknowledge receipt of the invoice either by acceptance or disputation.

Different invoice response dates may be established for geographically different Customer locations. The system updates the account register with the invoice response dates. At any time, the Supplier and the Customer can agree to change invoice response dates. A Rate Schedule Escalator determining the fees charged on each invoice is agreed between the Supplier and Independent Bureau. The escalator indicates the fee to be paid to the Independent Bureau by the Supplier and is dependent upon the agreed variable due date (payment) period. The lower the variable due date period, the lower the fees charged for each transaction, thereby creating significant incentive for the Supplier to reduce Days Sales Outstanding (DSO's). An account with payment terms of 30 days or less from the invoice date will normally attract the lowest rate. A higher rate schedule will normally apply in the case that the Customer defaults on payment.

STEP 2

An order for goods/services is issued by the Customer in accordance with the current trading arrangements between the Supplier and the Customer, e.g. by phone, fax, supply chain replenishment system, email, mail, web, personally.

On receiving the order, the Supplier (eg. Customer service team) places the order on the Supplier's in-house financial operating system

(e.g. JDE, SAP, ISP, BPCS, Attache, MYOB). This creates a sales data file. The Supplier accepts the order from the Customer, and may, if required/desired, access the Customer's account performance details (held by the Independent Bureau) as recorded in a real time credit reporting database prior to entering and confirming the order on the in-house operating system. This process will show if the Customer is on credit hold, suspension, credit limited, access to available funds etc., and may also provide the Supplier with current account performance information to make judgement should the Customer be requesting a large purchase. The

Supplier may accept, accept part of, or reject the order in accordance with the current arrangements between the Supplier and the Customer. If the Supplier rejects the order, the transaction is reversed in the

Supplier's in-house finance system, and the process ends at this point.

The Supplier may accept a part order in accordance with the current arrangements between the Supplier and the Customer. If so, details of what have been accepted, including the payment terms etc, are entered in the Supplier's in-house finance system.

If the order is accepted in full, the order details are confirmed in the Supplier's in-house finance system.

Following in-house procedures, the Supplier (eg. warehouse) runs a pick slip, picks the required goods ready for dispatch, and confirms the loaded quantities in the Supplier's in-house finance system. The confirmation that the required goods have been loaded for dispatch generates an invoice in the Supplier's in-house finance system, and a delivery advice for dispatch is printed. The invoice details queue in the Supplier's in-house finance system.

The Supplier may also access the Rate Schedule Escalator to establish, and consent to, the fee to be payable by the Supplier, for the predetermined payment delay by the Customer, to the Independent Bureau or Financier. The pre-set payment period by the Financier to the Supplier, is typically agreed prior to commencement of the trading relationship between participating enterprises (as per above) and may form part of the security offering by the Supplier, with payment generally being effected following the receipt, acceptance and authorisation of the invoice by the Customer. Typically, the default rate or fee will form part of the system master details maintained the Independent Bureau and be applied during the transaction process.

STEP 3 The Supplier will, in conjunction with the Independent Bureau determine the frequency of invoice generation and distribution - normally invoices will be created daily at the close of business or, for example, immediately following the despatch of goods from the warehouse. The Independent Bureau will cause the Supplier's in-house sales data file to be forwarded electronically to the Independent Bureau as per the agreed frequency. The file content will include all invoice data in relation to the sale, Customer identification numbers, debtors' ledger details and other history as agreed and required to complete the process, between the Supplier and the Independent Bureau.

Based on the business requirements of the Supplier and its in- house finance system, the parties will have previously agreed whether the in- house invoice data is pushed or pulled from the Supplier's in-house finance system to the Bureau system.

On receiving the sales data file in full and without corruption, the system sends an electronic confirmation to the Supplier's in-house finance system.

If the confirmation is not received by the Supplier's in-house finance system, an exception report is generated and routed to the Supplier's authorised person. If the Supplier's in-house finance system receives the confirmation, an electronic acknowledgement is sent to the Independent

Bureau's system and the process continues.

Upon receipt of the invoice details, the Independent Bureau's system compares the Customer against a list of suspended Customers. If the Customer is on the suspended list, the transaction is reversed in the system and the authorised persons of the Supplier and the Customer are advised of the reversal.

Upon receipt of the invoice details, the system compares the transaction against the credit limit and current liability in the Customer's account register. If the transaction exceeds the credit limit, the system generates an exception report.

Upon receipt of the invoice details, the Independent Bureau's system updates the account register. The Supplier's Customer Number (SCN) is matched to the Customer's Global Identification Number (GIN) held in the Independent Bureau's system. The system matches identifiers such as GIN, SCN and Australian Business Number (ABN) or similar, thus reducing the possibility of fraudulent transactions.

Upon receipt of the invoice details, the system applies the variable due date to the transaction. The variable due date is contained within the invoice and will be visible to the Customer on receipt of the invoice.

Upon receipt of the invoice details, the system applies the invoice response date to the transaction based upon geographic location, post code regions and suggested delivery times.

The Independent Bureau system recognizes and calculates the total amount of each the invoices contained within the file and calculates the fee to be charged to the Supplier by applying the Rate Schedule Escalator against the variable due date for each Customer. The Independent Bureau will maintain an account registerwith the available credit limit for each Customer account. The register may also contain information in relation to account performance under real time credit reporting and may be linked to smart card technology to provide details regarding the performance of the account or provide secure account details to other Suppliers in the network.

Upon receipt of the invoice file details, the system will (if required) pre-authorise transactions and report any limit exceeds or other requested and agreed information to the Supplier for action.

STEP 4

The Independent Bureau will then electronically send the invoice advice/details to the Customer for acceptance, authorisation and reconciliation against the goods receipt advice/delivery slip. The recipient will have the options to print the document or view on screen.

The Independent Bureau will have applied the variable due date (as previously agreed between Supplier and Customer) to the invoice. This information is maintained and held by the Independent Bureau to be used again when the deduction advice is activated to withdraw the funds from the Customer's account or similar. The information and account performance will also form the basis of "real time credit reporting".

STEP 5

The Customer will remotely dispute/reject/acknowledge/confirm receipt of goods on the invoice and simultaneously via a signature, pin code or similar device, accept, agree and authorise the payment terms. This authority then permits the Independent Bureau to process the transaction with the Financier and proceed to the next step in the transaction.

If rejecting the goods and / or payment terms in full, the Customer identifies the reasons for rejection in the system. The system places the transaction on hold and generates an exception report.

If accepting part of the goods and / or payment terms and rejecting the remainder, the Customer accepts the relevant items and identifies the reasons for rejection of the others in the system. The system continues the transaction process for the goods accepted, places the remainder of the transaction on hold, and generates an exception report.

If accepting the goods and / or payment terms in full, the system generates an acceptance report. If no confirmation is received by the system within the agreed invoice response period the system generates an exception report.

STEP 6

The acceptance/rejection/ authorization advices to the Supplier occurs at the frequency previously agreed by the parties. The frequency may correspond with the frequency of invoice data generation i.e. the system will download this data to the Supplier at the same time it uploads the

Supplier's invoice data each day.

Upon acceptance of the invoice details and / or the resolution of any disputes, the system updates the account register and applies the Supplier payment date to the transaction.

STEP 7

The Independent Bureau will authorise the funds, equal to the invoice value, to be transferred from the Financier to the Supplier's Bank account in a preset payment period time (eg. 24 or 48 hours) following confirmation, acceptance and authorisation of the invoice. The system provides a report of the total of all the relevant payments due to the Supplier. The Financier will transfer an amount equal to 100% of the invoice to the Supplier's Bank (SB) at the expiry of the preset payment period. The Financier informs the Independent Bureau that the transaction has successfully occurred. On receipt of these details, the system updates the account register. The system provides a report of all the successful transactions to the respective Suppliers.

STEP 8

Simultaneously, the Financier will generate a deduction advice on the Customer's account, equal to the amount advanced to the Supplier. The due date applied to the deduction advice will be advised from the Independent Bureau and will reflect the date maintained in the account register.

The Independent Bureau will also transmit an electronic copy of the deduction advice to the Customer, advising them as to the day the funds will be deducted from their account with their bank (CB). The system will provide a report of the total of all the debits due and payable by the Customer, demonstrating the total exposure of the Customer.

STEP 9 The Independent Bureau will confirm the rate charged to the Supplier via the rate schedule escalator incorporating any variances/defaults that may have occurred since the original payment of the invoice to the Supplier. This rate will reflect directly to the performance of the account. For example, an account with a payment date of 30 days from date of invoice will be on base rate, as opposed to an account with a due date of 65 days that may have a factor of 1.8 applied.

STEP 10 Upon reaching the deduction advice maturity date, the

Financier will cause the funds to be transferred from the Customer's account to complete the transaction in line with the details contained in the deduction advice. The Financier informs the Independent Bureau that the transaction has successfully occurred. On receipt of these details, the system updates the account register. If the Customer does not have sufficient funds in the account to satisfy the transaction, a default advice will register and the Customer's Bank will advise the Financier and the Independent Bureau of the default.

The system advises the Supplier and the Customer that a default has been registered and identifies any other transactions of the Customer that are currently in the system.

STEP 11

The system calculates the fees due to Independent Bureau by the Supplier for processing the invoice in accordance with the Rate Schedule Escalator. The Supplier is issued an electronic invoice by the Independent Bureau for the calculated fees. On the due date, the Supplier's Bank credits Independent Bureau with the appropriate fees from the Supplier's account. The Independent Bureau will record daily all transactional processing, including transfers by the Financier, invoice payments, total sales value and the associated rates as per the rates schedule escalator. The Independent Bureau will then invoice the Supplier and complete the transaction file as detailed above to receive the Independent Bureau's fee for services.

It will be readily apparent to the skilled addressee that the receipt of full payment of an invoice by the Supplier will assist in invoice payment reconciliation, while prompt payment will aid cash flow. Also, the

Supplier is always aware of the exact cost of the prompt payment, as this is calculated from the rate schedule supplied by the Independent Bureau.

If, for any reason, the Supplier or Customer requires a variation in the date when the payment to the Financier is to be deducted from the

Customer's account, the fee paid by the Supplier to the Independent Bureau can be varied eg. to extend the predetermined payment period from 45 to 60 days or for the applying of default fees for non-payment.

The Customer may still purchase goods/services on a deferred payment basis to suit its own cash flow requirements on the approval of the Supplier.

The Supplier (and the Independent Bureau and Financier) can have real time credit reporting on the Customer to decide whether or not to accept the Customer's order on the Supplier.

Subject to the Terms and Conditions of Sale and Retention of Title set by the Supplier, the Supplier will retain ownership of the goods until the respective invoice therefore is settled in full.

The disputes resolution system can also be used by the

Independent Bureau to assist participating enterprises in identifying supply chain performance of Suppliers, inherent transport or distribution difficulties, and Customers who continually raise claims for shortages, reject deliveries etc. in an attempt to delay payment.

This facility will assist the Supplier in reviewing current processes and implementing better overall efficiencies.

Depending on turnover and participating enterprises' specific requirements, eg. on a weekly/ monthly/ quarterly/yearly basis, different Rate Schedule Escalator fees scales may be applied to different Suppliers; or the

Supplier and the Independent Bureau may negotiate special rates eg. flag fall fee plus percentage of Invoice per transaction.

It will be readily apparent to the skilled addressee that the method of the present invention provides accelerated payment of Suppliers' invoices, which enable better Supplier cash flow management. Similarly, the Customer can better budget for delivery/payment cycles.

Various changes and modifications may be made to the embodiment described without departing from the present invention.

Claims

CLAIMS 1. A trading method between participating enterprises including:

(a) providing an Independent Bureau capable of communicating electronically with participating enterprises, Insurers, Service Providers and Financiers;

(c) obtaining from the Supplier, authorisation/agreement to set and/or vary the predetermined delay for the payment by the Customer to the Financier or Independent Bureau, subject to a fee payable to the Independent Bureau by the Supplier in return for payment by the Financier of the full amount of the Supplier's invoice for the delivery/provision of the goods and/or services to the Customer, within a preset payment period; and

(d) the Independent Bureau electronically advising the Financierto forward payment of the Supplier's invoice within the preset payment period, and to collect payment from the Customer within the predetermined delay.

2. A method as claimed in claim 1 , wherein: the Financier is also instructed by the Independent Bureau to receive a predetermined fee and/or interest payment from the Customer and/or Supplier.

3. A method as claimed in claim 2, wherein: the Independent

Bureau causes and collects the fee via the Financier and/or Service Provider, which is variable, from the Supplier when, an agreed predetermined time frame has elapsed or immediately after the Financier receives payment from the Customer, to complete the transaction.

4. A method as claimed in claim 2 and claim 3, wherein: the payment also includes any payment variations due to the scheduled payment not being received on the agreed variable due date or because of any default that may have occurred.

5. A method as claimed in claim 3, wherein: the variable fee will be set out in a rate schedule escalator, issued from time-to-time by the Independent Bureau, where the Supplier agrees to pay a higher fee and/or higher percentage of the invoiced price, to the Independent Bureau as the predetermined delay for payment by the Customer is increased and/or a reduction or extension in the preset payment period to the Supplier.

6. A method as claimed in claim 5, wherein: the variable fee is raised where the Customer has a poor, or below standard, credit record.

7. A method as claimed in any one of claims 1 to 6, wherein: the trading method further includes providing the Independent Bureau with a computer system which provides a software/hardware interface having the ability to communicate with multiple software/hardware protocols so that it may communicate electronically with the computer accounting systems of participating enterprises and Financiers having different computer systems or utilising different programs.

8. A method as claimed in claim 7, wherein: the electronic communication advising of receipt or authorisation of an invoice to the participating enterprises, which received the oπginal invoice, is by way of computer, facsimile or data transmission.

9. A method as claimed in claim 7, wherein: the Independent Bureau provides to participating enterprises that do not have suitable computerised systems, display or printout, means for advising each invoice recipient of receipt of invoice by the Independent Bureau for the respective payment according to agreed periods.

10. A method as claimed in claim 7, wherein: the Independent Bureau has a host program that can recognise the accounting package of participating enterprises, communicate with the various accounts packages through a network protocol, and convert received information to a standard format that the bureau can manipulate.

11. A method as claimed in claim 7, wherein: the Independent Bureau mirrors the various accounts packages of the participating enterprises to facilitate communication between the Independent Bureau and the participating enterprises, and the standard format includes a capacity for encryption to maintain security of data stored.

12. A method as claimed in claim 11 , wherein: the communication is encrypted and limited to one-way communication to enhance security of information kept in the computer files of the Independent Bureau and the computer files of the participating enterprises, the communication is encrypted and two-way communication with appropriate access rights provided to suit the circumstances.

13. A method as claimed in any one of claims 1 to 12, wherein: a disputes mechanism is established and is monitored by the Independent Bureau and is able to be actioned by any of the participating enterprises such that it does not provide clearance for payments to be made where a dispute exists between the participating enterprises in respect of a particular transaction until the dispute has been resolved.

14. A method as claimed in claim 13, wherein: should a party fail to transfer at the appropriate time an advised amount, that default be automatically notified to the Independent Bureau for relay to the participating enterprises for resolution, and such notifications reside in the Independent Bureau's computer as a historical record of each participating enterprise for inclusion in an independent credit report, which may be provided by the Independent Bureau to participating enterprises or other parties.

15. A method as claimed in claim 14, wherein: should a party fail to record a default, such performance shall also reside in the Independent Bureau's computer as a historical record of each participating enterprise for inclusion in an independent credit report which may be provided by the Independent Bureau to the participating enterprises.

16. A method as claimed in any one of claims 1 to 15, wherein: the method also includes providing the Independent Bureau with a computer system that maintains auditable records of all transactions processed by the Independent Bureau and accessing those auditable records to provide a credit report on a selected participating enterprise and to provide suitable auditable reports to Government.

17. A method as claimed in any one of claims 1 to 16, wherein: the Independent Bureau transmits the complete details of each of the invoiced amounts to the participating enterprise invoiced within a set minimum turn around time or as per an agreed frequency between the participating enterprise and the Independent Bureau.