Company using financial settlement solution from TradeCard to improve efficiencies, gain discounts for early payments
New York — August 5, 2004 — Burton Snowboards has tapped a solution from TradeCard to automate its trade transactions from procurement to payment, helping the snowboarding brand improve working capital management, eliminate letters of credit and drive new business process efficiencies.
Founded in 1977 and headquartered in Burlington, Vt., Burton was the world's first snowboard factory and remains today a pure snowboard company.
The company and its suppliers are using a Web-based solution from TradeCard to conduct global trade transactions online. The TradeCard solution 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, and discrepancies are managed online.
"TradeCard breaks down the wall between finance and operations," said Tom D'Urso, the company's treasurer. "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."
Overall, D'Urso said that he expects Burton's procurement-to-payment costs to be one-third to one-half of last year because of TradeCard. "Our suppliers sometimes ship 30 to 40 times on a single purchase order," D'Urso continued. "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."
In addition to streamlining processes, Burton 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.
"Our trade transactions created mountains of paperwork, which made it tough to capture early payment discounts," D'Urso explained. "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," said 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, according to TradeCard.
Burton Snowboards' suppliers also benefit from TradeCard's functionality, according to 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."