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HSBC’s Virtual Card Solution increases supply chain funding for Ricardo
For over 100 years, Ricardo have been providing engineering consulting services and developing solutions built on sustainable technological innovation. With a global presence spanning 23 countries, Ricardo are delivering technologically advanced solutions that ensure access to clean air and water, cross-sector engineering solutions to accelerate decarbonised transportation, innovation to support global net zero and industry agendas, comprehensive expertise in safety, assurance and certification.
HSBC were the bank of choice for Ricardo when searching for a solution to maintain working capital with one of their key suppliers.
Increased funding for the supply chain
Ricardo benefited from extended payment terms offered by one of their key suppliers. Working capital commitments had prompted the key supplier to review Ricardo’s current contract with a view to reducing the payment terms for their invoices.
Ricardo were looking for a solution to enable their key supplier to receive the funds earlier, whilst retaining their own working capital.
HSBC worked with us to identify a payment solution that enable us to support our supply chain, the solution leveraged the strong credit rating of Ricardo plc and has enabled our suppliers to be paid ahead of the commercially agreed terms with no adverse impact to our own cash flows. The additional cash liquidity provided to our supply chain helped build their resilience at a time of high inflation and corresponding cost pressures.
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Virtual Cards
HSBC’s Virtual Card Payment solution has been pivotal for Ricardo. Their key supplier became a merchant and agreed to receive a card payment from Ricardo at month end plus 5 days, increasing their working capital by reducing Ricardo’s extended payment terms significantly.
HSBC were able to offer Ricardo 90-day terms for card repayment which retained Ricardo’s required working capital.
HSBC’s collaborative solution was advantageous for both Ricardo and their key supplier ensuring their crucial working relationship. Several of Ricardo’s key suppliers are now accepting card payments to settle their invoices.
Working closely with Ricardo’s Head of Purchasing, we have together identified multiple suppliers that see the benefits of accepting card payment to settle invoices and to support their working capital needs. HSBC also supported a document that Ricardo uses to communicate with suppliers discussing the benefits of settling invoice balances using card payment solutions.
Both our customer and their suppliers have reported that accepting HSBC card payments was a simple process to on-board, staff interaction with both the Virtual Pay and MiVision portals was very straightforward and the solution was effective in supporting their working capital needs.
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The Success
- Retained working capital
- Enhanced view of spend
- Reduced risks
- Reduced reconciliation time
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