New York, August 5, 2004 – TradeCard Inc., the leading provider of on-demand financial supply chain services, announced that it has automated Burton Snowboards’ trade transactions from procurement to payment. Benefits for the world’s top snowboarding brand include improved working capital management, the elimination of letters of credit, and major business process efficiencies.
According to Tom D’Urso, the company’s treasurer, “Our procurement-to-payment costs will be one-third to one-half of last year because of TradeCard.”
Burton Snowboards and its suppliers use TradeCard to conduct global trade transactions online. TradeCard electronically routes, matches and stores trade documentation – from purchase orders to payment information. Each party has appropriate access to view and amend documents as the transaction progresses. Payments are automated based on supplier compliance of purchase order terms and conditions. Discrepancies are managed online.
“TradeCard breaks down the wall between finance and operations,” says D’Urso. “I use its corporate-wide view of procurement data to forecast working capital requirements. Now I can keep less cash on hand, and I have the right foreign currency at the right time to pay suppliers.” TradeCard calls this Just-in-Time Working Capital ManagementSM.
Suppliers Line up For New Financing Program
In addition to streamlining processes, Burton Snowboards also utilizes TradeCard’s Automated Supply Chain Financing program, which delivers early payment to suppliers in exchange for a discount off invoice. Suppliers sign up for the program in lieu of more traditional financing or factoring arrangements.
D’Urso says, “Our trade transactions created mountains of paperwork, which made it tough to capture early payment discounts. By automating these transactions, we’re able to offer suppliers payment in five days at a discounted rate. We’re surpassing the return we saw from extending payment terms. Plus, we no longer tie up time and working capital with letters of credit.”
One of Burton Snowboards’ largest suppliers, Canada-based Trak Sports, is on 30-day payment terms. “Our business with Burton increased by 56 percent this past year,” says Doug Barbor, the company’s president. “Supporting this growth on 30-day terms stretched our cash thin. We had to hire 60 more people and start purchasing far more raw materials. Now that we can opt for five-day payment terms, we have the cash we need to support Burton and grow our business.”
Buyers can fund an Automated Supply Chain
Financing program with their own cash or through financing from one of TradeCard’s partner financial institutions. The latter option is available at favorable rates because of buyers’ good credit and the visibility that partner financial institutions have into transactions.
Enterprise Application Functionality – on The Web "Our suppliers sometimes ship 30 to 40 times on a single purchase order,” says D’Urso. “Because TradeCard automatically matches relevant procurement and fulfillment documents, we really benefit from time savings. We’ve also created cool workflows on TradeCard, including payment authorization and audit trails for handling discrepancies. It’s very slick, especially compared to phone calls and e-mails going into our A/P department."
Burton Snowboards’ suppliers also benefit from TradeCard’s functionality, says Trak Sports’ Barbor. “Our CFO uses TradeCard to keep tabs on receivables. It’s helping him more precisely manage working capital and cut back on short-term borrowing. On the other side of the house, our head of production uses TradeCard to see purchase orders as they come in, so he can get advance notice on materials and manufacturing requirements.”
Buyers and suppliers securely connect to TradeCard using just a web browser, eliminating the need for any hardware or software investment. Organizations can also link TradeCard to their ERP systems, to enhance existing data. Burton chose this approach, integrating TradeCard with its SAP implementation in under 25 business days – a process that, says D’Urso, “could not have been smoother.”
Kurt Cavano, TradeCard’s chairman and chief executive officer, notes, “Working with Burton has been nothing short of great and has demonstrated why they are leaders in their field. Just like their snowboards, they were fast to get it, implement, and to get benefits."