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  1. Enter the Title of the procedure.
  2. Add the following Labels Labels: 
  3. Fill all fields as described
  4. Once the procedure is completed, publish it using the PtP Procure to Pay approval workflow


 Table of contents 

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Scope

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2. Add countries when the procedure is for a specific country (optional)

ERP

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References

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Attachments

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Objective

This document describes:

  • The global process overview

  • The vendor master data flow and information that must be updated at the different systems.

  • “Supplier Financing Program" Process Flow

    • NAM/EMEA

    • LAM/APAC

  • The procedures and controls implemented

  • The different tasks that must performed by different teams/persons along the process.

Supplier Financing context

Payment terms have been significantly worked out over the past years especially for large suppliers

Suppliers do look after cash and are not keen on increasing payment terms without any counter benefit

Cash management (forecast, flexibility, …) is an increasing area of focus for suppliers

Solvay benefits from attractive financing rates on markets, potentially more attractive than suppliers in some cases


The objective is:

  • Focus on large suppliers only (~>2/3m€ spend)

  • Bring to the table an added value innovative system for both suppliers and Solvay

  • Enhance cash management optimisation for both parties

  • Enable flexibility and tailoring approach for both parties


Solvay negotiates extended payment terms in exchange of what:

  1. Solvay processes received invoices and approves them

  2. When invoice approved, supplier can ask for payment before invoice maturity systematically or punctually

  3. If so, supplier paid by banking partner upon request & charged at a cost based on LIBOR & Solvay credit standings, for instance, DB proposed fee: 1,48% APR

Solvay pays  banking partner at maturity while continuing to manage PO, reception & invoice workflow


The benefits will be:

  • Enhanced supplier relationship management through the provision of innovative added value service to suppliers

  • Increased payment terms & enhanced working capital

  • No recurring costs for Solvay (“project” resources & systems set up only)

  • Flexible on boarding model as Solvay selects suppliers to be integrated and can adapt pricing mechanisms to suppliers

  • Structural working capital optimisation rather than end of period short term optimisations

  • Able to manage cash efficiently & with flexibility (automatic discounting  or invoice cherry picking discount): conversion of receivables into cash when and if desired

  • No service, set-up or unused credit lines fees

  • Captures Solvay financial markets attractiveness when relevant

  • Represent an alternative supplier  “low cost” funding lever

  • At least, on time payment secured

Global Overview

Master data Maintenance

Tanguy Moentack is in charge of the activation and change of SCF suppliers.

  • Currently there are 4 JP Morgan Vendors Created:

    VendorNameCityCountry
    2113681JPMORGAN CHASE BANK NANEW YORKUSA
    2823930J P MORGAN CHASE BANKLONDONUNITED KINGDOM
    4009699JPMORGAN CHASE BANK (CHINA) CO LTDSHANGHAICHINA
    9901018838BANCO J P MORGAN S ASAO PAULOBRAZIL


Note:

 SFP program is now running for Solvay Sodi in Bulgaria (CoCd 3438).

 

The set up is the same except for the factoring company. 
The only difference is instead of being JP Morgan it will be ING Bank (Vendor number 502562995).
The first vendor to be set up was vendor 602607403 so in case of doubt, you can use this vendor as a reference.


PF1_050

The first step is update the master data of the vendor classifying as a SFP vendor (supplier financing program) using XK02:


Then, insert the Permitted Payee (choice based on the suppliers region) using XK02:


PF1_020 and WP1_400

Maintain SFP - SM30 - Z1Y_SFP_SEL_ERP. The company code will be provided by the requester:


Then, the Payment Terms (provided by the requester) have to be update at Company and Purchasing Level (company, purchasing and plant view).


NOTE: NAM/EMEA - Ensure Vendor master data is aligned with PI1


  • Company view (using XK02):


  • Purchasing view (using XK02): Check the Purchasing Organization where Vendor is currently created using MKVZ or SE16_LFM1

  • Plant view: the update needs to be performed for all the Plants linked to the company for all the purchasing organisations linked to the vendor. 
    The plants not linked to the vendors must be linked for the WP1_400 system (only plants for the same country as the company code), if the payment term provided for SFP is different from the Payment term in Purchasing Orgs..

  The transaction SQ00 (Query areas - Standard Area ; Other user group: ZW_PU ; Query: ZMM-026) will provide you the list of plants by company:


For example a vendor linked only for the PO 3001:


The Plants 0214, 0215, 8058 and 8198 will need to the added or updated.


To add or update you use the transaction XK02:


NOTE: In PF1 we have transversal Purchasing Organizations, where the change will impact other Company Codes. All Porgs. starting with Z***, no change should be done at all levels and Requester will need to be informed, in order to renegotiate the SFP contract to all company codes instead. Example: ZC30 Foc. Packaging.

Message to be sent:

"This request will impact Purchase Organizations that are shared with other company codes where the Vendor is also created and not included on the initial request. Impacted Purchase Organizations & Company codes:

      • 4290 SOLVAY CHEM (US)
      • 0001 SOLVAY  (SCH)
      • 0270 SOLVAY CHIMICA (IT)
      • (...)



AP, Proviosioning and Materials team 

After the update made at vendors level the ticket needs to be transferred to the Materials team. They will analyse and update active contracts.


Hereafter, the requester is informed and, if not provided in the initial request, ask if:

  • Open items must be updated (If the answer is Yes transfer request to AP, and afterward, they should inform SC Payments, we don't need the ticket back)
  • Open POs must be updated (if the answer is Yes transfer request to Provisioning stating the Purch Org. and Plants impacted, and afterward, they should inform SC Payments, we don't need the ticket back)

If the answer is YES to both questions, ask Provisioning to transfer the ticket to AP and afterward, they should inform SC Payments, we don't need the ticket back.

To join

When a new company (affiliate) joins the program, the following actions must be taken:

  • LAM/APAC - Update Variant (Z1Y_SFP_COCKPIT_ERP) PF1/WP1

    • Varint: LAM

    • Varint: APAC

      NAM/EMEA - Update Variant (Z3Y_SFP_COCKPIT) - PI1

      PI1 variants:

    • EMEA

    • NAM

 

Supplier Financing

Who does What?

PSCE Perfomance Manager (J. Capellano) selects suppliers

PSCE Perfomance Manager (J. Capellano) signs contract

PSCE informs PtP SC AP + Data of each region

PtP Data sets up SFP master Data (clarify scope based on company code = payment terms at all levels)

PtP  AP confirms cut-off (clarify scope based on company code)

PtP AP updates payment method and criterias for payment in Payment Factory or in local payment

PtP AP runs job with daily file sent to JP Morgan (with open items from Vendor) - file per region (same program with different variants)

  • If doesn’t run...null and run again

    • JP Morgan confirms reception (PtP doesn’t monitor sending today)

    Solvay pays JP Morgan at invoice due date = Payment Terms for JP Morgan

    • Credit notes due dates (to be confirmed)


  • SFP Cockpit I and FI II- Update Permitted Payee at the time of posting

  • Comex (External Commerce) - external supplier invoices - generated by SC CUR (to confirm) - Load to cockpit?

  • Suppliers receives payment advice from JP Morgan

  • JP receives payment advice from Solvay