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Supply Chain Finance Glossary
The terms you will meet in supply chain finance, explained in plain language.
- Anchor buyer المشتري الرئيسي
- The large company at the centre of a supply chain finance program. Its approval of supplier invoices, and its credit strength, are what allow the bank to finance those invoices at a better price. Learn more →
- Annualized rate (APR) المعدل السنوي
- A discount or fee expressed as a yearly percentage, so that offers with different periods can be compared. A 1% discount for paying 30 days early is worth about 12% a year. Learn more →
- Cash conversion cycle (CCC) دورة التحويل النقدي
- The number of days between paying for stock and collecting cash from customers: days inventory + days sales outstanding − days payable outstanding. The shorter it is, the less working capital a business ties up. Learn more →
- Concentration risk مخاطر التركّز
- The risk that comes from depending heavily on one supplier or one buyer. Spreading financing across several counterparties reduces it.
- Credit limit (program limit) الحد الائتماني (حد البرنامج)
- The maximum amount a bank agrees to finance under a program. Each financed invoice uses part of the limit, and the limit is freed again when the invoice is paid.
- Days payable outstanding (DPO) متوسط أيام السداد (DPO)
- The average number of days a company takes to pay its suppliers. A higher DPO keeps more cash in the business, but long terms can strain suppliers unless they can get paid early.
- Days sales outstanding (DSO) متوسط أيام التحصيل (DSO)
- The average number of days a company waits to be paid by its customers after a sale. Early payment programs reduce a supplier’s DSO.
- Discount (financing fee) الخصم (رسوم التمويل)
- The amount taken off an invoice in exchange for paying it before its due date. In bank-funded programs it is the bank’s fee; in dynamic discounting it is the buyer’s return.
- Due date (maturity) تاريخ الاستحقاق
- The date on which the buyer has agreed to pay an invoice. In reverse factoring the buyer pays the bank on this date, whatever date the supplier was paid.
- Dynamic discounting الخصم الديناميكي
- A buyer-funded early payment program: the buyer uses its own cash to pay suppliers early, and the discount grows with the number of days paid early. No bank financing is involved. Learn more →
- Early payment الدفع المبكر
- Paying a supplier before the invoice due date, either by a bank (reverse factoring) or by the buyer (dynamic discounting), in exchange for a discount. Learn more →
- Factoring (receivables finance) تخصيم الفواتير (تمويل الذمم المدينة)
- A supplier sells its unpaid invoices to a financier to get cash before its customers pay. Unlike reverse factoring, it is arranged by the supplier, and pricing depends mainly on the supplier’s own risk.
- Invoice approval اعتماد الفاتورة
- The buyer’s confirmation that an invoice is correct and will be paid on its due date. An approved invoice is what a bank finances in a reverse factoring program.
- Irrevocable payment undertaking (IPU) التعهد غير القابل للإلغاء بالدفع
- A buyer’s binding commitment to pay an approved invoice in full on its due date. It gives the bank the certainty it needs to finance the invoice.
- Know your customer (KYC) اعرف عميلك (KYC)
- The checks a bank must run on a company and its owners before providing financing, required by anti-money-laundering rules.
- Payment terms شروط السداد (آجال الدفع)
- The agreed period between an invoice and its payment, for example 60 or 90 days. Supply chain finance lets buyers keep or extend their terms while suppliers are paid sooner.
- Post-dated cheque الشيك المؤجل
- A cheque dated in the future, common in Jordan as a way to settle supplier invoices. It leaves the supplier waiting, and returned cheques create risk; digital early payment replaces it. Learn more →
- Purchase order financing تمويل أوامر الشراء
- Financing provided against a confirmed purchase order, so a supplier can produce or buy the goods before an invoice exists.
- Reverse factoring (payables finance) التمويل العكسي (تمويل الذمم الدائنة)
- A buyer-led program: once the buyer approves a supplier invoice, a bank pays the supplier early, minus a fee based on the buyer’s stronger credit, and the buyer pays the bank on the due date. Learn more →
- Supplier onboarding انضمام الموردين
- Bringing a buyer’s suppliers onto the platform: the buyer invites them, they register their company, and they can then request early payment on approved invoices.
- Supply chain finance (SCF) تمويل سلاسل التوريد
- A set of solutions that use a buyer–supplier relationship to improve working capital for both sides: suppliers get paid early on approved invoices while buyers keep their payment terms. Learn more →
- Working capital رأس المال العامل
- The cash a business has available for day-to-day operations: current assets (cash, receivables, stock) minus current liabilities (payables and short-term debt).