Unit - 4
Use Case 1 & 2
Q1) Explain blockchain using financial software and system (FSS).
A1) The financial software and system (FSS) is a type of ledger which is used in payments technology and transaction processing.
The FSS can offers the diversified portfolio of software products.
It hosts the payment services and software services.
The FSS re used to build innovative products and services.
The FSS caters wholesale and retail payments initiatives such as the leading banks, financial institutions, processors, merchants, governments and regular bodies.
The blockchain in financial industry work tremendously by using FSS.
In blockchain it helps to reduce the need for bank branches or boost the competition by lowering barriers to entry.
The blockchain technology has various benefits over financial services which facilitates the bilateral settlement by eliminating intermediaries failures, delays, collateral costs, minimize credit risk, faster implementation of transaction, enhanced transparency in operations, amongst the other.
The blockchain is block of records of data which has three main properties such as:
- Decentralization
- Transparency
- Immutability
The data and information is stored at multiple entities and each of the network own the data.
The FSS technology is powerful hence ultimate consequences are impossible.
The FSS service take care of results and deployment of blockchain.
In financial services the new transaction is undertaken where it is automatically stored in block and added to the chain.
Every block is secured using electronic cryptographic algorithms to safeguard the reliability of the database.
The transparency is given by blockchain in FSS is high.
The blockchain protects the personal identity by cryptography represented by their public address.
The tempering of the data is impossible in the blockchain where once the data is added into the chain the further changes in the block cannot be made unless it is approved by all the members.
Immutable records are visible to all participant in blockchain.
The immutable improves the data accuracy, security and helps to reduce the risk of fraud.
The blockchain is safe, secure, decentralized, transparent and relatively cheaper.
Q2) Explain capital market and insurance in blockchain.
A2) Capital Markets
The capital market is the pairing of issuers with demand capital and investors which are corresponding to risk and return profiles.
The issuer can be entrepreneurs, startup, or large organizations.
In this, the processing of raising the capital becomes challenging.
The firms are faces increasingly stringent regulations, longer times to get to market.
It violates from interest rates and liquidity risk.
The blockchain gives the multiple benefits as follows for several capital market use cases.
- Elimination of single point of failure through decentralized utilizes
- Digitization of processes and workflows
- Reducing operational risk of fraud
- Human errors
- Facilitation of capital market
Insurance
The blockchain gives the security on data verification, claims processing and disbursement, reducing processing time.
The property and insurance claims are entities where fraud can be happened and claim assessment can extend for longer period.
The insurance allows following thing such as:
- Authentication documentation and KYC/ AML data
- Reducing the risk of fraud
- Facilitating claim assessment
- Automated claims processing with use of smart contracts
- Automated parameterized contracts
- Automated disbursement of insurance payments
- Tokenized reinsurance markets
Q3) Write use case on financial software and system.
A3) The financial software and system (FSS) is a type of ledger which is used in payments technology and transaction processing.
The FSS can offers the diversified portfolio of software products.
It hosts the payment services and software services.
The FSS re used to build innovative products and services.
The FSS caters wholesale and retail payments initiatives such as the leading banks, financial institutions, processors, merchants, governments and regular bodies.
The blockchain in financial industry work tremendously by using FSS.
In blockchain it helps to reduce the need for bank branches or boost the competition by lowering barriers to entry.
The blockchain technology has various benefits over financial services which facilitates the bilateral settlement by eliminating intermediaries failures, delays, collateral costs, minimize credit risk, faster implementation of transaction, enhanced transparency in operations, amongst the other.
The blockchain is block of records of data which has three main properties such as:
- Decentralization
- Transparency
- Immutability
The data and information is stored at multiple entities and each of the network own the data.
The FSS technology is powerful hence ultimate consequences are impossible.
The FSS service take care of results and deployment of blockchain.
In financial services the new transaction is undertaken where it is automatically stored in block and added to the chain.
Every block is secured using electronic cryptographic algorithms to safeguard the reliability of the database.
The transparency is given by blockchain in FSS is high.
The blockchain protects the personal identity by cryptography represented by their public address.
The tempering of the data is impossible in the blockchain where once the data is added into the chain the further changes in the block cannot be made unless it is approved by all the members.
Immutable records are visible to all participant in blockchain.
The immutable improves the data accuracy, security and helps to reduce the risk of fraud.
The blockchain is safe, secure, decentralized, transparent and relatively cheaper.
Q4) Explain Blockchain in Financial Software and Systems (FSS): (i) Settlements, (ii) KYC, (iii) Capital markets, (iv) Insurance.
A4) The financial software and system (FSS) is a type of ledger which is used in payments technology and transaction processing.
The FSS can offers the diversified portfolio of software products.
It hosts the payment services and software services.
The FSS re used to build innovative products and services.
The FSS caters wholesale and retail payments initiatives such as the leading banks, financial institutions, processors, merchants, governments and regular bodies.
The blockchain in financial industry work tremendously by using FSS.
In blockchain it helps to reduce the need for bank branches or boost the competition by lowering barriers to entry.
The FSS technology is powerful hence ultimate consequences are impossible.
The FSS service take care of results and deployment of blockchain.
(i) Settlements
The FSS services supports the push and pull payment transactions.
The FSS provides the report on settlement positions to the participant bank for establishing settlement finality.
The FSS clears the transactions and provide settlement report.
The FSS is the instant payment service.
The fast settlement services facilitate the immediate settlement between participants obligation.
(ii) KYC
Each candidate is individually checked by KYC in traditional way by bank.
KYC is a process to get information about identity and addresses of the purchaser in bank.
Each user is checked by government structure or organization individually.
The individual participant are responsible for collecting personal data.
The KYC helps to check and confirm that everything is normal in network.
The bank takes the responsibility to enter data about user into the blockchain platform where the banks get access.
When a user wants to use the services of other bank the system validates the user identity before second bank access.
The information exchange operation is initiated by using private key when user must log in with crypto currencies transaction.
(iii) Capital Markets
The capital market is the pairing of issuers with demand capital and investors which are corresponding to risk and return profiles.
The issuer can be entrepreneurs, startup, or large organizations.
In this, the processing of raising the capital becomes challenging.
The firms are faces increasingly stringent regulations, longer times to get to market.
It violates from interest rates and liquidity risk.
The blockchain gives the multiple benefits as follows for several capital market use cases.
- Elimination of single point of failure through decentralized utilizes
- Digitization of processes and workflows
- Reducing operational risk of fraud
- Human errors
- Facilitation of capital market
(iv) Insurance
The blockchain gives the security on data verification, claims processing and disbursement, reducing processing time.
The property and insurance claims are entities where fraud can be happened and claim assessment can extend for longer period.
The insurance allows following thing such as:
- Authentication documentation and KYC/ AML data
- Reducing the risk of fraud
- Facilitating claim assessment
- Automated claims processing with use of smart contracts
- Automated parameterized contracts
- Automated disbursement of insurance payments
- Tokenized reinsurance markets
Q5) Write short note on financial software and system (FSS) with impacts of blockchain in financial sector.
A5) The financial software and system (FSS) is a type of ledger which is used in payments technology and transaction processing.
The FSS can offers the diversified portfolio of software products.
It hosts the payment services and software services.
The FSS re used to build innovative products and services.
The FSS caters wholesale and retail payments initiatives such as the leading banks, financial institutions, processors, merchants, governments and regular bodies.
The blockchain in financial industry work tremendously by using FSS.
In blockchain it helps to reduce the need for bank branches or boost the competition by lowering barriers to entry.
The FSS technology is powerful hence ultimate consequences are impossible.
The FSS service take care of results and deployment of blockchain.
Impacts Of Blockchain In Financial Sectors
- The blockchain impacts on banking sector and insurance sector.
- The blockchain helps in bank space where bank has issues in recoverability of loans granted by bank. The use of blockchain in banking breakthrough all the transactions right from the disbursal till its end use will be recorded in block. The blockchain helps in tracing the diversion of loaned funds.
- The blockchain used in administering trade finance transaction for the banks. The various documents like LCs, bill of loading, shipping bills, tax invoices can be recorded in centralized repository in blockchain where all the parties involved can access the real time data.
- All the large amount of documents and transactions are recorded using blockchain distributed ledger where fraud and tempering cannot be done. The blockchain gives the security over the records by decentralization property.
Q6) Explain settlement and KYC in blockchain.
A6) Settlements
The FSS services supports the push and pull payment transactions.
The FSS provides the report on settlement positions to the participant bank for establishing settlement finality.
The FSS clears the transactions and provide settlement report.
The FSS is the instant payment service.
The fast settlement services facilitate the immediate settlement between participants obligation.
KYC
Each candidate is individually checked by KYC in traditional way by bank.
KYC is a process to get information about identity and addresses of the purchaser in bank.
Each user is checked by government structure or organization individually.
The individual participant are responsible for collecting personal data.
The KYC helps to check and confirm that everything is normal in network.
The bank takes the responsibility to enter data about user into the blockchain platform where the banks get access.
When a user wants to use the services of other bank the system validates the user identity before second bank access.
The information exchange operation is initiated by using private key when user must log in with crypto currencies transaction.
Q7) Write short note on:
Capital Market
Insurance
A7) Capital Markets
The capital market is the pairing of issuers with demand capital and investors which are corresponding to risk and return profiles.
The issuer can be entrepreneurs, startup, or large organizations.
In this, the processing of raising the capital becomes challenging.
The firms are faces increasingly stringent regulations, longer times to get to market.
It violates from interest rates and liquidity risk.
The blockchain gives the multiple benefits as follows for several capital market use cases.
- Elimination of single point of failure through decentralized utilizes
- Digitization of processes and workflows
- Reducing operational risk of fraud
- Human errors
- Facilitation of capital market
Insurance
The blockchain gives the security on data verification, claims processing and disbursement, reducing processing time.
The property and insurance claims are entities where fraud can be happened and claim assessment can extend for longer period.
The insurance allows following thing such as:
- Authentication documentation and KYC/ AML data
- Reducing the risk of fraud
- Facilitating claim assessment
- Automated claims processing with use of smart contracts
- Automated parameterized contracts
- Automated disbursement of insurance payments
- Tokenized reinsurance markets
Q8) Explain key features of FSS.
A8) The FSS services supports the push and pull payment transactions.
The FSS provides the report on settlement positions to the participant bank for establishing settlement finality.
The FSS clears the transactions and provide settlement report.
The FSS is the instant payment service.
The fast settlement services facilitate the immediate settlement between participants obligation.
Features of FSS:
In real time processing of payments extends far beyond the payment system to incorporate core banking, fraud, reconciliation and settlement.
Following are the features of FSS payments:
It supports multiple payments instruments.
It supports multi-currency.
It supports standard ISO8583/87 message formats for financial transaction.
It is flexible and easy to configure workflows.
It is clearing settlement.
It has better risk management.
Better exceptions handling and dispute management
Real time accounting, status, information, dashboard available online to view real time and historic transactions.
It provides multi layered Security.
Q9) Explain Blockchain in trade/supply chain.
A9) The data in supply chain is not always visible, available or trusted.
The blockchain in supply chain helps partners to share trusted data through permissioned blockchain solutions.
The blockchain with supply chain is used in the disruption of business.
The block chain is helpful in use of leaders to handle the disruption of business and resilience for the future.
The supply chain gives the sourcing responsibly and better visibility to minimize disputes.
The blockchain provides the guarantee of authenticity for business and consumers product.
The supply chain network can be limited by one up to one down visibility.
The blockchain in supply chain gives the more visibility to the permissioned participants across all supply chain activities.
The smart contract which automatically trigger when predefined business conditions are met.
The block chain with supply chain gives the visibility into operations and the ability to take actions.
The new supplier onboarding is time consuming for both seller and buyers in supply chain.
Q10) Explain trade chain and financial software and system.
A10) The data in supply chain is not always visible, available or trusted.
The blockchain in supply chain helps partners to share trusted data through permissioned blockchain solutions.
The blockchain with supply chain is used in the disruption of business.
The block chain is helpful in use of leaders to handle the disruption of business and resilience for the future.
The supply chain gives the sourcing responsibly and better visibility to minimize disputes.
The blockchain provides the guarantee of authenticity for business and consumers product.
The supply chain network can be limited by one up to one down visibility.
The blockchain in supply chain gives the more visibility to the permissioned participants across all supply chain activities.
The smart contract which automatically trigger when predefined business conditions are met.
The block chain with supply chain gives the visibility into operations and the ability to take actions.
The new supplier onboarding is time consuming for both seller and buyers in supply chain.
The financial software and system (FSS) is a type of ledger which is used in payments technology and transaction processing.
The FSS can offers the diversified portfolio of software products.
It hosts the payment services and software services.
The FSS re used to build innovative products and services.
The FSS caters wholesale and retail payments initiatives such as the leading banks, financial institutions, processors, merchants, governments and regular bodies.
The blockchain in financial industry work tremendously by using FSS.
In blockchain it helps to reduce the need for bank branches or boost the competition by lowering barriers to entry.
The FSS technology is powerful hence ultimate consequences are impossible.
The FSS service take care of results and deployment of blockchain.
Q11) Explain applications of FSS.
A11) Applications of FSS
FSS payment works in background, underpinning in financial institution’s customer facing systems for range of propositions.
Following are some of the use cases where FSS is used.
Person to person
It used for bill sharing with friends.
It also used in emergency fund transfer and remittance.
Business to business
The just-in-time supplier payment is used in business to business.
In this use case, immediate bill payments with E-invoicing is used.
Person to business
E-commerce and in store POS payment is providing by person to business.
The emergency bill payments and rent payments can be done by person to business.
Business to person
Salary or wage payments for temporary workers or contract employees and instant insurance claim payouts are provided by business to person application of FSS.
Merchant to person
It initiates the collecting money requests for purchase.
Government to person
Emergency disaster payments and welfare benefits are given by government to person FSS.
Person to government
Tax payments and payments of fines are taken by person to government.
Q12) Explain provenance of goods and visibility.
A12) Provenance of Goods
The provenance is the production for the financial ecosystem.
It combines the distributed, trustless and immutable characteristics of blockchain.
The provenance is used by firms such as Jefferies, figure and caliber loans to reduce cost and improve execution.
The company places an order for goods with supplier.
The supplier sends the goods to the purchasing company.
The balance to be pay is agreed by company within established time frame in between 30 to 180 days.
The invoice is send to the supplier for goods to the financial institution.
Visibility
The greater visibility is provided by the blockchain in supply chain into the origin and movement of goods and more accurate timely supply chain data to address inefficiencies.
The visibility is provided in global value chains risk.
Each organization records their own version pf truth, leading errors, high cost and reputational and financial risk.
Q13) Explain provenance of trade/supply chain finance.
A13) Supply chain finance is also known as reverse factoring.
The supply chain trade finance is used to open account trade between buyers and sellers with established relationship.
The supply chain includes the third party funding models and emerging platform driven system based on digital technologies.
There are two types of supply chain are included in commercial activities such as physical supply chain and financial supply chain.
The supply chain is also referred as buyer side finance.
The supply chain finance is used to cover supplier financing for large buyers
Q14) Explain invoice management discount.
A14) The invoice discounting is financing option which allows business to access funds by leveraging their sales ledger.
The unpaid accounts are used by company for accessing the funds and boost their cash flow.
The amount raised is usually a significant portion of the invoice value.
There are two parties involved in invoice discounting.
Seller
Financier
The invoice financier does not gain any control over to business’s sales ledger.
The customer is not aware of financier’s involvement in invoice discounting.
The business is responsible for collecting payment form customer.
Q15) Explain how blockchain used trade or supply chain.
A15) Blockchain in Trade/Supply Chain
The trade finance system involves multiple parties in the network such as financial institutions, their corporate clients but also logistic companies, insures, electronic invoicing, procurement and compliance service, ERP provider and various technology providers.
The trade finance is optimal use case of blockchain.
The blockchain helps in trade finance transformation.
The blockchain impacts and gives benefits on entire eco system.
The trade finance involves various technologies like blockchain which becomes the path of their success.
The members of trade finance taking the initiatives to launch the blockchain consortia to harness the value of such technology to improve trade and working capital finance solution.
Both system and technology define, challenge, develop, test and deploy new products and processes.
They can design new normal for efficient trade finance transactions.
The data in supply chain is not always visible, available or trusted.
The blockchain in supply chain helps partners to share trusted data through permissioned blockchain solutions.
The blockchain with supply chain is used in the disruption of business.
The block chain is helpful in use of leaders to handle the disruption of business and resilience for the future.
The supply chain gives the sourcing responsibly and better visibility to minimize disputes.
The blockchain provides the guarantee of authenticity for business and consumers product.
The supply chain network can be limited by one up to one down visibility.
The blockchain in supply chain gives the more visibility to the permissioned participants across all supply chain activities.
The smart contract which automatically trigger when predefined business conditions are met.
The block chain with supply chain gives the visibility into operations and the ability to take actions.
The new supplier onboarding is time consuming for both seller and buyers in supply chain.
There is main project which focused on trade finance blockchain solution is Macro Polo Network.
It the largest project and growing technology in trade and working capital finance network in the world.
The blockchain is the very attractive technology provides to work towards a common goal.
Following are some of the trade financing technologies.
- We.trade – focusing on bank payments
- SMEs VAKT and KOMGO – addressing needs in commodities
- Tradelen, Cargo – for shipping
- Freight, Voltron and TradeConnect – letters of credit and e-bills of loading
Q16) Write down benefits of supply / trade chain finance.
A16) Supply chain finance is also known as reverse factoring.
The banks helps in number of ways in corporate client trade for fee.
The supply chain is building on what business have termed as traditional trade finance.
The supply chain trade finance is used to open account trade between buyers and sellers with established relationship.
The supply chain includes the third party funding models and emerging platform driven system based on digital technologies.
Benefits Of Supply/Trade Chain Finance
The supply chain finance offers benefits to both buyers and suppliers.
Following are the advantages offers to the buyers:
- Improving working capital position
- Reducing supply chain risk
- It is strengthening supplier relationships.
- It is sued to gaining an advantage in negotiations
- It used to support business growth.
Following are the benefits for the suppliers.
- It gives the working capital benefits.
- It shows the lower cost of funding.
- It improves the cash flow forecasting.
- It is used to access to a user friendly platform.
Q17) Write short note on:
Provenance of goods
Visibility
Trade/supply chain finance
Invoice management discounting
A17) Provenance of Goods
The provenance is the production for the financial ecosystem.
It combines the distributed, trustless and immutable characteristics of blockchain.
The provenance is used by firms such as Jefferies, figure and caliber loans to reduce cost and improve execution.
The company places an order for goods with supplier.
The supplier sends the goods to the purchasing company.
The balance to be pay is agreed by company within established time frame in between 30 to 180 days.
The invoice is send to the supplier for goods to the financial institution.
Visibility
The greater visibility is provided by the blockchain in supply chain into the origin and movement of goods and more accurate timely supply chain data to address inefficiencies.
The visibility is provided in global value chains risk.
Each organization records their own version pf truth, leading errors, high cost and reputational and financial risk.
Trade/Supply Chain Finance
Supply chain finance is also known as reverse factoring.
The supply chain trade finance is used to open account trade between buyers and sellers with established relationship.
The supply chain includes the third party funding models and emerging platform driven system based on digital technologies.
There are two types of supply chain are included in commercial activities such as physical supply chain and financial supply chain.
The supply chain is also referred as buyer side finance.
The supply chain finance is used to cover supplier financing for large buyers.
Invoice Management Discounting
The invoice discounting is financing option which allows business to access funds by leveraging their sales ledger.
The unpaid accounts are used by company for accessing the funds and boost their cash flow.
The amount raised is usually a significant portion of the invoice value.
There are two parties involved in invoice discounting.
Seller
Financier
The invoice financier does not gain any control over to business’s sales ledger.
The customer is not aware of financier’s involvement in invoice discounting.
The business is responsible for collecting payment form customer.
Q18) Analyze the trade chain using blockchain.
A18) Supply chain finance is also known as reverse factoring.
The banks helps in number of ways in corporate client trade for fee.
The supply chain is building on what business have termed as traditional trade finance.
The supply chain trade finance is used to open account trade between buyers and sellers with established relationship.
The supply chain includes the third party funding models and emerging platform driven system based on digital technologies.
There are two types of supply chain are included in commercial activities such as physical supply chain and financial supply chain.
The supply chain is also referred as buyer side finance.
The supply chain finance is used to cover supplier financing for large buyers.
The supply chain finance is kind of invoice factoring but basic factoring in terms of supply chain finance.
In this the customer or the ordering selects the invoices they would like to be paid early to the supplier. The supplier also has a option to choose the invoices he would like to encash thought the factor.
Hence, in supply chain finance all the three parties should be work in collaboration.
Supply chain is the better option for getting easy business loan due to simplicity of contract involved.
Trade finance required lot of negotiation because of sheer number of parties involved.
Supply chain is straight forward collaboration between supplier, buyer and the factor.
The business can select the critical suppliers and pay them early to ensure a smooth running of operation at either end.
Q19) Write short note on consensus protocols of blockchain in FSS.
A19) The blockchain is a distributed and decentralized network which provides privacy, immutability, transparency and security.
There is no central authorization in blockchain therefore it is completely secure and verified structure.
This is possible only because of consensus protocol.
Consensus protocols are the core part of blockchain network.
The consensus algorithm is a procedure through which all the participants of the blockchain network reach a common agreement about present state of distributed ledger.
The consensus algorithm gives the reliability to the blockchain.
Following are the various consensus algorithms used by blockchain network.
- Proof of work
- Practical byzantine fault tolerance
- Proof of stake
- Proof of burn
- Proof of capacity
- Proof of elapsed time
Proof of work
This consensus algorithm is used to solve complex mathematical puzzles.
The mathematical puzzles requires lot of computational power and then node who solves the puzzle soon that gets the mine to the next block.
The bitcoin uses the Proof of Work consensus algorithm.
In this consensus the miner is selected for next block generation.
Practical byzantine fault tolerance (PBFT)
The PBFT consensus algorithm is used in asynchronous system where no upper bound on when the response to the request will be received.
This consensus algorithm is used on low overhead time.
Practical byzantine fault tolerance selves the many problems regarding to byzantine fault tolerance solution which is available.
BFT is the consensus used when some of the nodes in the network fail to respond or respond incorrect information.
This algorithm is used in blockchain and distributed computing.
Proof of stake (PoS)
It is alternative of proof of work (Pow).
The PoS used by Ethereum which is shifted from PoW consensus.
In this consensus algorithm the validators invest on the coin of the system by locking up some of their coins as stake.
Instead of investing on expensive hardware to solve complex puzzles validators invest on locking up coins as stake.
After that all the validators start validating the blocks.
Validators placed bet on the block that they wants to be added if the block is discovered the block is added into the chain.
As the block gets added by validators they win reward according to their bets and their stakes get increase respectively.
At the end, a validator is chosen to generate a new block based on their economic stake in the network.
Hence PoS encourages validators through an incentive mechanism to reach an agreement.
Proof of burn (PoB)
The validators in the PoB invest on ‘burn’ coins by sending it to address from where the loss is irretrievable.
The validators does not invest on expensive hardware equipment.
The validators commit the coins to unreachable address to achieve privilege to mine on the system based on random selection process.
Hence the burning means the validators committing the long term investment on their short term loss.
The PoB implemented will cause the native currency to be burn by validators in bitcoins.
The more coins the validator burn, better are their chances of being selected to mine the next block.
Proof of capacity (PoC)
In the proof of capacity consensus algorithm, the validators invest on the hard drive space.
The validators does not invest on the expensive hardware or burning coins.
As validator gets more hard drive spaces they can get chance to mine for next block and can earn block reward.
Proof of elapsed ti me (PoET)
The proof of elapsed time is one of the fairest consensus algorithm where the next block is chosen fairly only.
This consensus algorithm is used by permissioned blockchain network.
In this algorithm, every validator get a fair chance to create its own block.
Every node is waiting for random amount of time with adding a proof of their wait in the block.
The block gets broadcasted to the network for others consideration.
The validator who has least time of value in proof part that validator get chance to add their block in the network of blockchain.
Q20) Explain how invoice discounting works with advantages and disadvantages.
A20) The invoice discounting is a invoice finance facility which allows business owners to leverage the value of their sales ledger.
When user sends any invoice then customer gets the proportion of total amount available from the lender.
How Invoice Discounting Works?
The invoice is sent after completion of order or work.
Once a copy of invoice has been received by lender, the pre-agreed proportion of each invoice is deposited to the customer’s bank account.
The money can be used to pay bills, repay debt or part of a long term plan for growth.
The invoices are sent after completion of work is the key to success with invoice discounting.
It allows for regular influx of cash throughout the month.
The invoice can give the normal collection of payment generally upto 80% to 90% on agreed percentage on each invoice has been paid.
Fees and charges are deducted from remaining balance and remitted to or claimed by lender in invoice discounting.
The financier should be clear with charges and fee structure.
This helps in budget and make the best use of each cash input.
Advantages Of Invoice Discounting
- Release locked cash
- Reduced collection period
- Improves cash flow
- No asset as collateral
- No effects on business relation
- Allows more room for credit sales
- Control confidentiality
- Win win situation for business
Disadvantages Of Invoice Discounting
- Decrease in profit margins
- People’s perception
- Only commercial invoices
