Our latest innovation gives those in charge of working capital finance access to a range of market-leading features.  This provides more control, saves time and increases security. With Aronova Live! you have:

• immediate assessment of invoice and supplier eligibility
• access to instant decisions on acceptance into a funding programme for buyers/sellers
• real-time processing of seller/buyer invoice data and eligibility
• improved cash flow and optimised working capital positions
• rapid access to collections and credit control analysis which frees capacity more quickly
• full automation of processes, reducing operational risk

Ben Grant, Head of Partnerships, explains how Aronova Live! has been developed and tested with our global partners:

“We have a team of developers dedicated to continual innovation based on our global network of funding providers, banks, institutional investors, insurers and corporates. We know that those responsible for receivables programmes struggle with the risk, inefficiency and added cost of manual processes. Aronova Live! was developed in response to these issues and we know that those now using it have seen their operations benefit substantially.”

Instant decisions and reduced fraud

Aronova Live! works by establishing a secure API connection between the data sources. This enables the near instant communication of changes (new records, changed records, closed records) to accounts receivable, accounts payable and credit collection data. In addition, other asset classes that can be expressed as an invoice such as portfolios of corporate loans, leases, credit cards can also be included in the data flow.

This makes it possible to calculate global debtor credit limits, assess invoice eligibility and process invoice purchases live and on demand. While not everyone requires this, we know that for some the ability to calculate availability or sell an invoice within minutes of processing is a major benefit. And it’s not just improved efficiency, the technology also reduces fraud risk.

The API creates an uninterrupted flow of information directly from the originating invoice platform or accounting package. With no manual intervention, data manipulation is less likely, resulting in improved programme security and better data integrity.  Automation also takes some of the legwork out of Know Your Customer and anti-money laundering verification.

The importance of digitisation

The trend towards digitisation of trade receivables during the pandemic has accelerated as remote working has made paper-based processes even less viable, and injected urgency into financial service providers’ previously slow-burning digital initiatives. As a result, digital financing flows multiplied across the entire financial services industry during 2020, helping working capital finance platforms reach a critical mass of user and transaction numbers.

We know that real-time technology will become the norm in the years ahead, but we’re pleased to be able to offer this facility long before many others have even started to automate their manual processes. 

You can learn more about AronovaLive! here or contact us for more information.

The post AronovaLive! – real-time control of working capital finance appeared first on Aronova.

The quarterly newsletter from our MD David Baker provides an overview on:

• the recovery after the pandemic
• instant credit limit decisions
• rated funding programmes
• Q4 forecasts and predictions

Start of the return to normality

Q3 was a really interesting quarter for Aronova, and as for many businesses, the green shoots of new business, market opportunities and a relative return to pre-Covid normality were increasingly evident.  People are starting to return to offices, albeit on a “hybrid” basis, markets are definitely waking-up and I for one can’t wait for President Biden to announce a date for the re-opening of US borders to us Brits.  I’ve missed my regular trips to the US and I really look forward to seeing old friends and colleagues again.  We’ve all got by with Zoom, Teams etc, but sometimes you can’t beat a good ‘old-fashioned’ face-to-face meeting.

From a marketing and communications perspective, our Q3 focus has centred very much around Aronova Live!, the move towards instant eligibility and the implications this has for invoice-backed working capital programmes.  Hopefully, many of you will have seen our Aronova Live! video that was expertly put together by our friends at Fingo Marketing and Financial Services Partnership.  Q4 will see us build further on the Aronova Live! theme, so watch out for more LinkedIn activity and further video stories.

Making instant credit limit decisions

We seem to be having lots of conversations at the moment about instant credit limits, the use of payment information and how to set credit limits when no previous trading experience exists.  Many of these conversations are driven by “marketplace” or “factoring” opportunities, where offering a credit facility, possibly linked to funding, can make a real difference.

For many years, we’ve been writing insurer-approved credit limits based purely on accumulated payment data. These instant global credit limits often sit within the DCL structure of a trade credit insured programme. They can either be written on a single corporate entity, or for the benefit of a corporate group, and shared amongst associated group subsidiaries. However, the key thing about these limits is their status. For many credit insurers these trading experience-based limits have the same insurance status (and therefore insurance certainty) as limits written by an underwriter.

There is increasing debate around extending the use of trading experience to incorporate “mesh” credit limits, i.e. sharing credit limits across multiple corporate relationships.  But to do this, you need lots of trading experience information. 

Let’s say Supplier A is trading with Buyer A and we’ve used the trading experience record to generate a credit limit for Buyer A. Buyer A now wants to trade with Supplier B, but Supplier B has never traded with Buyer A. In this case, it might be possible to use a “mesh” credit limit, i.e. to allow Supplier B to benefit from Buyer A’s trading experience with Supplier A.  Thanks to our use of DUNS numbering, “mesh” credit limits are technically possible, but there are other implications we need to work through such as key supplier relationships and terms of trade. 

Watch this space. Mesh limits are transformative and will fundamentally change how credit limits are established and maintained in high-volume invoice processing environments.  The role of artificial intelligence is key, and numerous factors need to be considered each time a mesh credit limit decision is made or reviewed.

Sometimes there’s the option of using credit agency data to make instant credit limit decisions. However, this is not always possible and there are many parts of the world where reliable credit agency data, particularly on SME businesses, is simply not available. From experience, we’ve always favoured blending payment data with credit agency intelligence. Even if the credit agency can only verify the existence and ongoing trading status of the corporate, this adds confidence to any payment-based credit limit decisions we make.

Rated funding programmes

The other theme we’ve seen during Q3 is an increase in rated transactions and, operationally, the need for Aronova to apply assessed eligibility criteria when determining the eligible asset pool.  It could also require the calculation of reserve requirements using S&P type methodologies.

Ratings are important for some funding programmes and can fundamentally change the pricing and overall availability of different funding options.  Some funding pools may only be available to transactions with a certain rating, and this might only be achievable if the programme is insured and if operational risk is demonstrably controlled.  Newer, smarter forms of credit insurance more closely bind Aronova, transaction data, assessed eligibility criteria and effective risk transfer, bringing greater certainty to rated transactions.

We’ve been supporting rated transactions for a number of years, but even in this very traditional segment of the market, the availability of regularly updated invoice data is enabling change.  Those familiar with rated transactions will be aware of the required monthly cycles of data calculation but we’re increasingly seeing a desire to move towards daily calculations and a more dynamic reserve calibration.

Looking forward to Q4-2021

In Q4 we’ll continue our LinkedIn activity and have a number thought leadership articles planned. We’ll further develop the Aronova Live! theme, focussing on different aspects such as Smart Insurance, Fraud and Instant Cash. We’re also planning on being more active with ITFA, and Ben Grant, our Head of Partnerships, has been asked to be part of a new InsureTech panel.  More on this over the coming months.

Lastly, how many of you have started arranging office Christmas parties?  Well we have, but ours will be a lot more reserved than in previous years. We’re planning a company-wide lunch in our Fetcham Park offices and we’re currently choosing a menu from a selection of external caterers. It’s amazing to think that this will be the first time in nearly two years that we’ll have managed to get all the Aronova staff at together in the same location. For some, it will be the first time they’ll have met their work colleagues face-to-face.

Best wishes,

David Baker
Managing Director

The post Aronova quarterly update – October 2021 appeared first on Aronova.

And it seems like not just us here at Aronova who are feeling this. The market is really coming back to life and we’re involved in conversations with new funders and insurers, looking to do some really innovative things to fill the working capital finance gaps that have grown during lockdown.

Utilising the Aronova Live! technology that our Managing Director David Baker spoke about in our last update is enabling ways of providing funding that were previously unachievable and fulfilling some really interesting requirements that I’d like to share with you:

Instant SME supplier payments

We have partnered with our friends over at Blackstar Capital Europe and a large US-based invoicing platform to provide instant financing of SME suppliers on a pre-approval basis. However, where SCF has attracted a lot of negative press recently and where there are concerns about the accounting treatment of SCF, our programmes are set up as individual RPAs, all signed and managed through the solution to get vital liquidity into supply chains quickly and effectively

• Using historic trading data, we are able to identify high-quality suppliers who are eligible for the programme. Then, with our Live! technology and APIs, we take instant feeds of data from the invoicing platform as invoices are submitted, check eligibility against programme criteria and credit limits and provide immediate decisioning back to the payments provider to get the money into their accounts moments later.
• Full, end-to-end automation ensures that these processes are seamless, providing excellent data integrity and greatly enhanced programme security and anti-fraud measures.

This programme is live but we’re also working closely with a large US-based business process outsourcer to create a solution for their clients. More on this soon!

Instant Seller eligibility and capacity reserving for Factors

The factoring world is a highly competitive sector where even small additional benefits in accessing the right funding can make a real difference. A large and growing proportion of our clients are in this space with many well-known names using Aronova to keep ahead of the curve.

Right now, we’re working with a number of our clients to use our Live! solution to help them with seamless new seller onboarding and capacity reserving.

Whilst some of our programmes are already providing instant payment of individual invoices, for many of our clients, the need to transfer the cash immediately isn’t there.  But there is a need to instantly check eligibility and then maintain that eligibility for a period of time.  We call this capacity reserving and it gives certainty that when the time comes for the actual purchase, the invoices are still eligible and capacity hasn’t been used up by other invoices.

Capacity reserving is seamlessly built into Aronova Live – we receive invoice data via our APIs, immediately run eligibility and then return eligibility results live. Eligible invoices could then be purchased, but if the purchase is deferred, new invoices could be submitted which then take up the same capacity, making our previously eligible invoices ineligible.  This is where capacity reserving comes into play and its particularly important where the eligibility criteria includes aggregate checks such as country, sector or debtor group caps.

So what we do is set an eligibility time-out – a period of time in which we guarantee the eligible amount and, during which, other invoices can’t displace those already deemed eligible. Eligible invoices can be sold at any time during the time-out window, with the certainty that they are still eligible.  However, if eligible invoices aren’t sold during the time-out window, then the guarantee lapses and the reserved capacity is released back to the programme. So for a programme that wants to check eligibility as soon as invoices are raised, but wants to batch purchase those invoices daily or intra-day, Aronova Live! has it all covered!

In other news

Lastly, we’d like to announce our recent membership of ITFA to work with them on their InsureTech panel. We recently participated in a great webinar with our good friends over at AIG about fraud from an insurer’s perspective, looking at the challenges that fraudsters pose but also the benefits of great technology in combating this.

Whilst we talk a lot about the view from the funding side, we work very closely with insurance, helping to ensure policy compliance for the programme and providing enhanced certainty in the case of a claim. We also do a lot of work with insurers to help them keep track of the fluid nature of the assets in an invoice-backed working capital programme and ensuring they are well protected throughout the life of the policy.

We’re very much looking forward to getting stuck in!

We’ll be back next quarter with some more updates but in the meantime, stay safe and I hope to be able to meet with you in person as the world wakes up!

Ben Grant         
Head of Alliances

The post Aronova quarterly update – July 2021 appeared first on Aronova.

Earlier in the year  London celebrated the milestone of 15M UK citizens being vaccinated against Covid – a great achievement by the UK government, but my thoughts watching this took me back exactly 12 months ago.  I was in New York, my first US trip of probably 7 or 8 planned for 2020 and I’m not sure I’d even heard of Covid – oh how times change.

Like many companies, the last year has seen us transition to a remote working business, interspersed with brief periods of office based face-to-face working as lockdowns came and went.  We’re thankful we’ve been able to continue trading pretty much as normal and that our revenues have remained strong.  Whilst I’m not saying that 2020 was the easiest of years, we come into 2021 in a much stronger position than many.

But, as for when I’ll be able to use my now ‘frozen’ Virgin Atlantic tickets from 2020, well I’m hopeful that travel corridors or vaccine passports permitting, I might get back to New York during the latter part of this year and I’ll be heading straight to Harry’s restaurant just off Wall Street to celebrate!

Aronova Live!

Last year was difficult in many ways, but we’ve certainly not been idle, and Q4 saw the launch of Aronova Live!, our API based product delivery platform.  This was an important development for Aronova, enabling our clients to instantly exchange data via a secure host-to-host connection, and whilst on the surface this sounds like some kind of “techie development”, the implications for invoice-backed working capital programmes are profound:

• Instant eligibility, availability, credit limits and invoice sale, 24 hours a day – in response to requests from a number of our larger clients, Aronova Live! makes it possible to calculate global debtor credit limits, assess invoice eligibility and process invoice purchases on demand, and whilst we know this approach isn’t for everyone, for some the ability to calculate availability or sell an invoice within minutes of processing it, is game-changing,

• Improved programme security, reduced fraud risk and better data integrity – with API’s information flows to us directly from the originating invoice platform or accounting package, with no manual intervention, no delays and dramatically reduced possibilities of data manipulation.

We’ll continue to expand the scope of Aronova Live! during 2021.

Payables Programmes

For many years, Aronova has specialised in the operation and management of receivables-backed working capital programmes – 2020 saw us also move into payables.  Many people see payables as simply the other side of the coin to receivables – change a few screen labels and you’re there, but alas it’s not quite as simple as that.

Our payables programmes are supported by a number of new eligibility rules, targeting payables specific characteristics such as invoice approval and expected payment dates.  Our trigger functionality was also extended to identify ‘under-performing’ payables, with the option of issuing mandatory repurchase notices.  Oh, and we also changed some screen labels.

Whilst payables was probably the main divergence for us, we also saw a number of other asset classes, especially in the corporate loan space and this is an area we’ll look at more closely in 2021.

The Funding Point

I’d lastly like to talk about The Funding Point, our new programme delivery platform that we’ve been working on for about 18 months.  As I write this newsletter in mid-February 2021, we’re in the final throws of testing The Funding Point and its amazing ability to operate invoice-backed funding programmes that require multiple collateral pools.

It took me a while to get my head around multi-collateral pools and I’ve found myself asking the “so what” question many times.  But I’m convinced that structurers and programme arrangers currently don’t really think about tranching a programme into multiple collateral pools because they’ve traditionally been a nightmare to operate and costly to setup.  Well, The Funding Point changes all of that.

Imagine a payables programme where you want different eligibility criteria, funding arrangements and risk transfer provisions depending on whether an invoice is approved or un-approved.  Or a receivables programme where you want to tranche a book of receivables by risk and use the different collateral pools to manage risk-based pricing and syndication.  The Funding Point lets you easily setup and automatically manage these processes.

I promised my marketing team I’d keep this short and sweet, so I think I’ll stop here.  We’ll aim to issue an update on a quarterly basis, so until May, please keep safe.

David Baker
Managing Director

The post Aronova quarterly update – March 2021 appeared first on Aronova.

Our North and South American business volumes have steadily been increasing over the last few months. To support this expansion, we’ve decided to set-up a US subsidiary – Aronova Inc and we’ll maintain a permanent support presence from our new East Coast offices just outside Asbury Park, New Jersey.

Asbury Park is quickly establishing itself as the main media and technology hub in New Jersey and we liked the idea of being a part of this development. With easy links into New York and fast access to a range of domestic and international airports, Asbury Park is an ideal place for Aronova to establish itself. Oh, and I forgot to mention, there are some pretty good beaches along the New Jersey shoreline … not that this influenced our decision!

Aronova Inc is initially being setup to provide technical, product and operational support for our North and South American clients and partners. From June, Aronova Inc will be based at:

Aronova Inc
3600 Route 66,
Suite 150,
Neptune,
NJ 07753,
USA

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