When Technology Meets Factoring: A Former Treasury DirectorReflects on Hidden Frictions
This article is written by our partner, Afakto When balance mismatches, data rejections and clunky file formats paralyse factoring operations, cash flow suffers. But smarter tools are rewriting the rules. Former Finance & Treasury Director Simon Daller shares how automation helped him restore momentum… and control. Forget the 100% financing myth The theoretical promise of factoring is simple: sell €100 in receivables, receive €100 in financing. But in practice, numerous variables interfere: guarantee reserves for risk coverage, invoice exclusions, eligibility mismatches, and unexplained discrepancies between assigned batches. According to Daller, the lack of real-time visibility on these parameters can distort expectations. What seems like a high financing rate on paper often falls short once operational constraints come into play. The use of upstream automation, such as pre-assignment checks and file validations, has emerged as a lever to improve both the percentage financed and the speed of fund disbursement, leading to measurable ROI gains. Manual Processes as a Hidden Cost Factoring workflows are highly data-dependent. Feeding a factor with reliable, up-to-date information requires precision and consistency. When those tasks (data extraction, formatting, transmission) are handled manually, each file becomes a potential bottleneck. In many organisations, these tasks consume several hours per batch and expose the company to human error. By connecting ERPs, accounting systems and factor portals via API or sFTP, companies can streamline the process. Automation not only reduces internal workload, but it also makes the financing process more predictable, moving closer to an invoice-to-cash dynamic that is both instantaneous and transparent. The Critical Role of Balance Reconciliation Among the main causes of delayed financing is the presence of balance mismatches between client records and the factor’s own systems. Even minor discrepancies can result in multi-day delays, significantly affecting working capital requirements. To address this, some companies are now implementing daily automatic reconciliations using factor confirmations. Combined with pre-assignment controls and real-time reporting of accounting variances, this approach allows teams to correct issues before they become blockers: reducing both downtime and operational uncertainty. Changing Factors Without Starting Over Switching factoring partners is often seen as a high-risk operation, requiring internal teams to rebuild or adapt data structures, file formats and communication protocols. Yet these transitions can be executed with minimal disruption, provided that the right tools are in place. Dedicated connectors that embed the specifications of major factoring partners now make it possible to automate mapping, formatting, and testing in parallel with existing operations. This enables a smoother migration, with real-time alerts and contingency plans in place, and without additional workload for operational teams. Technology-Driven Results Afakto, a SaaS platform designed by finance professionals for finance teams, has positioned itself as a solution to these operational pain points. By centralising visibility, automating data exchanges and providing compatibility with multiple factoring partners, it allows companies to take control of their factoring processes without overhauling existing systems. Results reported by users include: Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.
Franklin
AI in Treasury: A Partner, Not a Replacement
This article is written by Palm At Palm, we take a practical view of the role of AI in treasury and cash management. Rather than positioning AI as a revolutionary force that will replace people, we see it as a powerful enabler that reduces manual workload and brings agility to your processes. We believe in embedding AI thoughtfully into day-to-day workflows to solve real-world challenges. Cash forecasting and AI Our approach begins with understanding that treasurers need solutions built specifically for their needs, not generic technology. Here’s how our cash forecasting system works in practice: Step 1: Understanding your financial language When you start with Palm, we first sit down together and have a deep-dive chat about how you organise your cash today. Just like every language has its grammar peculiarities, every company has its own financial language. We believe that understanding your financial language is critical. Specifically for cash forecasting: This foundational step is crucial; it’s literally teaching our system to speak your financial language. The more specific context our AI has, the better decisions it can propose or execute on. Step 2: Bringing your data into our system Next, we focus on getting your (financial) data into our system. For example when it comes to bank statements: In addition, we focus on getting all the relevant information into our system. This is where integrations come in, in which we can automatically connect with many ERP and Payroll systems. Moreover, if you prefer to manually upload your forecasts or data our AI can automatically recognise and map your data into a compatible format. Imagine if you had to sort through hundreds of receipts by hand. Our AI is like having a helper who organises them all for you in minutes, but still checks with you to make sure everything is right. Step 3: Smart categorisation that gets smarter with your input Once your data is in our system, our AI helps categorise all your transactions: It’s like having an additional team member who quickly learns exactly how you like things done and executes that going forward. Step 4: Forecasting your future cash position This is where everything comes together to give you a valuable, transparent and clear view of your cash position for the next 13 weeks: We’re actively working on making the process of determining your cash forecast as seamless as possible. We envision workflows where context can be automatically gathered from stakeholders, consolidated and reviewed without the manual hassle. Why this makes the difference for treasurers If you’re a treasurer, you might have felt left behind by technology. Many systems seem built for tech experts, not finance professionals. Our approach is different: Your data security is non-negotiable We understand that you’re dealing with your company’s financial heart. That’s why security isn’t an add-on for us, it’s built into everything we do: Expanding our AI scope The above zooms into our cash forecasting processes and what role AI plays in them today. We believe that AI will play an increasing role in the future. At Palm, we aim to keep iterating and identifying new use cases in which AI can play a role. A few examples we are actively iterating on: The Palm Difference: AI that works for you What makes our approach special is that we’ve embedded AI thoughtfully into our core product features. It’s not about flashy technology or replacing human expertise. It’s about practical benefits that make your job easier today: Tangible Outcomes for Your Treasury Function: In the end, our AI is simply a really good assistant that helps you do your job better. You remain the expert. You make the decisions. We just make it easier for you to do what you do best. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.