Category: Credebt Exchange Tips & Help

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

When reviewing individual Credebt Exchange Statements (i.e. Exchange transaction statements for individual Debtors that are access from the Exchange Trade Centre | Transaction Statement), you will notice that some items in the Reference column show a specific letter and number beside each trade. These symbols are:

• A-Trades – Allocated Trades
• R-Trades – Reconciled Trades
• C-Trades – Cleared Trades

 
Any Trade without a specific letter and number beside it means that Trade has occurred and is not yet Settled, i.e. no payment has been received that pays the Face Value of the ETR in full.

All payments received on a Debtor’s account appear on the Debtor’s Exchange statement and are numbered in sequence, i.e. the first payment number is 1, the second is 2, etc. Trades with an A – and number beside them mean that a payment (with the same corresponding number) has been received but is not yet reconciled. For example, A1 – 98765 means that the first payment received on this Debtor account has been allocated to invoice reference 98765.

Trades with an R – and number beside them mean that a payment has been received and it has been reconciled too. For example, R1 – 98765 means that the first payment received on this Debtor account has been reconciled to invoice reference 98765.

Trades with a C – and number beside them means that a payment has been received, is reconciled and also that the Reserve has been paid to the Originator. For example, C1 – 98765 means that the first payment received on this Debtor account has been reconciled to invoice reference 98765 and the Reserve amount has been paid to the Originator. This concludes the entire life-cycle of the specific ETR.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

When using Upload Revolving ETR (or opening any Trade), the date entered in the Expected Date is very important and should be clearly understood. The Exchange calculates the daily Discount using the payment date entered in the Expected Date field, i.e. if an Originator estimates their Debtor will pay in 60 days and the ETR is Settled (i.e. paid in full by the Debtor) in 55 days, the Exchange still calculates the daily Discount for the entire 60 days.

The Originator should carefully consider, and give their best estimate of, when a particular Debtor will Settle a specific ETR. When creating a Debtor on the Exchange Trade Centre, setting blanket terms of 90 days may reduce/remove the red warnings that appear on the Overdue Now column in the Exchange Trade Centre | Transaction Statement (that affects the release of any Reserve as documented in the Overdue Policy), but may also increase the cost of funds to the Originator.

As explained in the Credebt Exchange® Low Cost Capital information leaflet, the Exchange is a fast moving, liquid market and confirmed RSA Offers to Originators means that specific funds are allocated to that Originator. The funds are allocated based on:

• Total Low Cost Capital required (to meet their working capital requirements)
• The Day Sales Outstanding [DSO] value specified by the Originator

 
An Originator that requires working capital of €1.0m with a DSO of 45-days will require ½ the funds allocation that an Originator with a DSO of 90-days requires. Credebt Exchange® is charged with operating an equitable trade balance between the demand from Investors and the supply from Originators. Over allocation to an Originator undermines the Exchange’s ability to maintain its equitable trade balance.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

As an experienced user of the Exchange, you will now understand the importance of the R-Trade. Before any Reserve is paid on any Debtor account, it must first be reconciled to show R-Trades that equal the Debtor payment(s). To reconcile a Debtor account, login to the Exchange Trade Centre | Dash Board and select the Transaction Update menu item on the left side menu. Using the Manual Transaction interface payments are reconciled to ETR before being submitted to the Back Office for approval. If correctly reconciled, the Balance field displays a 0.00 or -0.00 value.

Simply select the Debtor’s Name from the list available in the drop-down dialog, then select a single payment from the Payment(s) drop-down dialog and, holding down the CTRL button on your keyboard, select the invoices and credit notes that reconcile the selected payment exactly.

If the invoices and credit notes do not match the payment amount exactly, then check either of the check boxes: & Specific Deductible(s) or & Trailing Balance until the Balance field displays a 0.00 or -0.00 value. Once a zero Balance figure is shown, submit the form.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

If you are a new user of the Exchange, it is recommended that you read the comprehensive Originator Trading Instructions. As an experienced user, there are two simple steps to complete to successfully upload a Revolving ETR to the Trade Floor, namely:

• Open a Trade
• Upload Revolving ETR

 
Open a Trade

Login to the Exchange Trade Centre | Dash Board and select the Open a Trade menu item on the left side menu. Use this Open a Trade interface to enter the entire value of all the invoices that you plan to sell to this Debtor over a specific period of time, e.g. 12 months. Once all the fields in this form are populated, use the Submit button to send this trade to the Trade Floor. IMPORTANT:- allow at least one trading day for this Revolving ETR Trade to be traded.

Upload Revolving ETR

Once the Debtor specified in the Revolving ETR Trade entered above is traded, that Debtor is now authorised for uploading Revolving ETR. Each time you have an invoice to this Debtor that you wish to trade, select the Upload Revolving ETR menu item on the left side menu of the Exchange Trade Centre | Dash Board. Once all the fields in this form are populated, use the Submit button to send this trade to the Trade Floor. IMPORTANT:- see the warning notice on the top of this interface to check the time that trades must be submitted by in order to receive the Purchase Payment on a TomNext basis. See the image below:

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Before reading this article, it is important that you download and read the Originator Transaction Manual.  To use some of the links provided in this article, you should also login to the Originator Exchange Trade Centre | Dash Board.

In some cases, Debtors do not pay the Credebt Exchange® Account Bank and the Originator must transfer the payment to Credebt Exchange®.  When doing so, it is important that the Originator notifies the Trade Desk that this payment has been made.  Using the Transaction Update menu option in the Exchange Trade Centre | Dash Board, there are two principal ways to notify the Trade Desk that the Originator has transferred a payment to the Credebt Exchange® Account Bank.

The Exchange Trade Centre | Transaction Update form makes it possible to notify the Trade Desk of two types of payment:

• Payment that is allocated to a Debtor as an A-Trade (until it can be converted to an R-Trade)
• Payment against a specific invoice(s) that is reconciled as an R-Trade

With Specific Allocation

When entering a payment as an A-Trade, the Debtor and the amount of the payment are entered before saving the form.  As explained in the Reserve Policy, Reserve payments are only paid against R-Trades.  To enter an R-Trade, the Originator checks the ‘With Specific Allocation’ check box.  This enables the Originator to then select the specific invoices that the payment is to be reconciled too.

In instances where a single payment from a Debtor does not exactly match specific invoice(s), it can still be entered using with either:

• Specific Deductible; or
• Trailing Balance

 
Specific Deductible

Specific Deductibles is used if there is an automatic deduction applied by the Debtor.  An example might be an agreed trade rebate, or an early payment discount.  Depending on your industry sector, such rebates are agreed and applied without the necessity for a specific document, or deduction notice being issued.  In these instances, the Specific Deductible(s) check box is used.

For example a payment of 10,000 is made, less a deductible of 2%.  In the Amount field 9,800 is entered and specific invoices in the ‘With specific reference to’ text box are selected.  The selected invoices will total 10,000 and because the payment received is only 9,800 the ‘Balance’ will show -200.00.  In order to process this payment, 200.00 must be entered in the Specific Deductible field on the form.  Now that the Balance is 0.00, the form can be submitted.

Trailing Balance

Trailing Balance is used if there is a remittance notification from the Debtor that itemises specific invoices but the amount received does not exactly match the sum total of the invoices indicated.  An example might be an over payment, or an payment against an invoice that was not traded on the Exchange.  In these instances, the Trailing Balance check box is used.

For example a payment of 10,000 is made, but the invoices being paid only add up to 9,500.  In the Amount field 10,000 is entered and specific invoices in the ‘With specific reference to’ text box are selected.  The selected invoices will total 9,500 and because the payment received is greater than 9,500 the ‘Balance’ will show 500.00.  In order to process this payment, 500.00 must be entered in the Trailing Balance field on the form.  Now that the Balance is 0.00, the form can be submitted.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Before reading this article, it is important that you download and read the Originator Transaction Manual. To use some of the links provided in this article, you should also login to the Originator Exchange Trade Centre | Dash Board.

In some cases, Debtors do not pay the Credebt Exchange® Account Bank and the Originator must transfer the payment to Credebt Exchange®. When doing so, it is important that the Originator notifies the Trade Desk that this payment has been made. Using the Transaction Update menu option in the Exchange Trade Centre | Dash Board, there are two principal ways to notify the Trade Desk that the Originator has transferred a payment to the Credebt Exchange® Account Bank.

The Exchange Trade Centre | Transaction Update form makes it possible to notify the Trade Desk of two types of payment:

• Payment that is allocated to a Debtor as an A-Trade (until it can be converted to an R-Trade)
• Payment against a specific invoice(s) that is reconciled as an R-Trade

With Specific Allocation

When entering a payment as an A-Trade, the Debtor and the amount of the payment are entered before saving the form. As explained in the Reserve Policy, Reserve payments are only paid against R-Trades. To enter an R-Trade, the Originator checks the ‘With Specific Allocation’ check box. This enables the Originator to then select the specific invoices that the payment is to be reconciled too.

In instances where a single payment from a Debtor does not exactly match specific invoice(s), it can still be entered using with either:

• Specific Deductible; or
• Trailing Balance

 
Specific Deductible

Specific Deductibles is used if there is an automatic deduction applied by the Debtor. An example might be an agreed trade rebate, or an early payment discount. Depending on your industry sector, such rebates are agreed and applied without the necessity for a specific document, or deduction notice being issued. In these instances, the Specific Deductible(s) check box is used.

For example a payment of 10,000 is made, less a deductible of 2%. In the Amount field 9,800 is entered and specific invoices in the ‘With specific reference to’ text box are selected. The selected invoices will total 10,000 and because the payment received is only 9,800 the ‘Balance’ will show -200.00. In order to process this payment, 200.00 must be entered in the Specific Deductible field on the form. Now that the Balance is 0.00, the form can be submitted.

Trailing Balance

Trailing Balance is used if there is a remittance notification from the Debtor that itemises specific invoices but the amount received does not exactly match the sum total of the invoices indicated. An example might be an over payment, or an payment against an invoice that was not traded on the Exchange. In these instances, the Trailing Balance check box is used.

For example a payment of 10,000 is made, but the invoices being paid only add up to 9,500. In the Amount field 10,000 is entered and specific invoices in the ‘With specific reference to’ text box are selected. The selected invoices will total 9,500 and because the payment received is greater than 9,500 the ‘Balance’ will show 500.00. In order to process this payment, 500.00 must be entered in the Trailing Balance field on the form. Now that the Balance is 0.00, the form can be submitted.

Any request for a reversal of any payment received by a Debtor that is paid into the Credebt Exchange® Account Bank must be submitted in writing on official headed paper from the Originator. This can be submitted via email to the Trade Desk, however it is more efficient to use the Transaction Update facility, accessible from the Exchange Trade Centre | Dash Board.

In all instances where Credebt Exchange® receives a payment from a Debtor, it must be returned, in whole, to the Debtor unless the documentation submitted by the Originator clearly shows that the amount received is due to the Originator. In such instances, before diverting the payment and releasing the funds to the Originator, an invoice(s), statement, letter, email or other communication that specifically references the exact amount received by Credebt Exchange® Account Bank must be provided. On receipt and verification of this information, Credebt Exchange® Account will release the funds to the Originator.

For reasons relating to proper title and ownership, in the absence of any documentation being received within 72-hours of the funds being received into the Credebt Exchange® Account Bank, the funds will be returned, in whole, to the Debtor that sent the payment.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Once all the details of an ETR trade are entered correctly, the Originator has the option to:

• Save
• Submit & Automatic Send
• Submit & Manual Send

It is important to understand the function of each button and what occurs when each of these buttons is used. Initially, all Originators use the Submit & Manual Send until they check and confirm that each the Debtor Email (highlighted in red with the label “ETR Invoices are Emailed to this Email Address”) is correctly entered in the Debtor’s Account Contact Details. Once all Debtor Email are confirmed, notify Support so that they can enable Submit & Automatic Send on your account.

Save

Save causes the Trade to be saved so that it can be posted to the Trade Floor some time later. Use this when processing multiple invoices at the same time so that each one can be reviewed prior to posting and actually selling this ETR on the Trade Floor.

Submit & Automatic Send

Submit & Automatic Send causes the Trade to be sent directly to the Trade Floor immediately. This button also sends the invoice directly to the Debtor email address that was entered under the Debtors Account Contact Details when creating the Debtor. When using Submit & Automatic Send, a BCC copy of the communication is sent to the Originator so that they know the email was delivered successfully.

Submit & Manual Send

Submit & Manual Send causes the Trade to be sent directly to the Trade Floor immediately. This button does not email the invoice to the Debtor. This button is used to produce a PDF copy of the stamped invoice so that it can be printed and sent to the Debtor by hand, by courier, or by surface mail.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Once all the details of an ETR trade are entered correctly, the Originator has the option to:

• Save
• Submit & Automatic Send
• Submit & Manual Send

It is important to understand the function of each button and what occurs when each of these buttons is used. Initially, all Originators use the Submit & Manual Send until they check and confirm that each the Debtor Email (highlighted in red with the label “ETR Invoices are Emailed to this Email Address”) is correctly entered in the Debtor’s Account Contact Details. Once all Debtor Email are confirmed, notify Support so that they can enable Submit & Automatic Send on your account.

Save

Save causes the Trade to be saved so that it can be posted to the Trade Floor some time later.  Use this when processing multiple invoices at the same time so that each one can be reviewed prior to posting and actually selling this ETR on the Trade Floor.

Submit & Automatic Send

Submit & Automatic Send causes the Trade to be sent directly to the Trade Floor immediately.  This button also sends the invoice directly to the Debtor email address that was entered under the Debtors Account Contact Details when creating the Debtor. When using Submit & Automatic Send, a BCC copy of the communication is sent to the Originator so that they know the email was delivered successfully.

Submit & Manual Send

Submit & Manual Send causes the Trade to be sent directly to the Trade Floor immediately.  This button does not email the invoice to the Debtor.  This button is used to produce a PDF copy of the stamped invoice so that it can be printed and sent to the Debtor by hand, by courier, or by surface mail.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Reconciled receipts occur automatically when a payment is received that has the exact same value as the Face Value of a single Traded ETR. The Reserve paid to the Originator is calculated based on the time it takes for a Traded ETR to be Settled (commonly referred to as Day Sales Outstanding [DSO] in accounting terminology). For automatically reconciled receipts, determining the DSO is simply a case of subtracting the Purchase Date from the Payment Date. As explained in the following paragraphs, determining the DSO for payments against multiple ETR is not straightforward.

Frequently, Debtor payments do not match the exact Face Value of Traded ETR. Regularly, payments are intended for multiple Traded ETR and even multiple Debtors. It is neither practical nor plausible to expect Originators to manually reconcile their Debtor balances on a regular basis and/or at a specific time, or day. In the absence of perfectly reconciled Debtor balances, it is important that the Reserve is paid efficiently. Ensuring that the Reserve on every Traded ETR (whether reconciled or not) is paid at the earliest possible time is the governed by the Credebt Exchange® Cash Balance Policy.

The Credebt Exchange® Cash Balance Policy governs the system that calculates the Reserve based on the commonly accepted and recognised accounting principal of First In, First Out [FIFO]. FIFO is typically used to calculate the value of inventory at the end of any specific period and, when adapted for Traded ETR, the FIFO method means that Traded ETR purchased first are Settled/paid first and newer ETR remain unpaid.

Using the FIFO method, the DSO is calculated using the oldest Purchase Date for multiple Traded ETR assigned to a single Debtor payment. Similarly, an Originator remitting a single payment against multiple ETR, payable by multiple Debtors, uses the same method. TARGET2 specifies the number of days in a month and the Reserve for all ETR is consistently calculated as follows:

Reserve = Face Value – (Face Value x RSA x DSO)/30 – Purchase Price*

* For every day that the ETR remains unpaid it is this formula that is used to calculate the reduced Reserve, less any processing commission.

With the Credebt Exchange® Cash Balance Policy ensuring that the oldest Traded ETR are assigned to the oldest payments, the oldest ETR are automatically regarded as Settled and newer Traded ETR are assigned to ending balances. The actual flow of Traded ETR and Settled ETR may not exactly match the FIFO pattern but the balance outstanding against unpaid ETR will always be correct. The following example illustrates the FIFO method used in the Credebt Exchange® Cash Balance Policy:

As an example, a Debtor with three Traded ETR due to be Settled in 90-Days on different Expected Dates, makes a single payment against all three ETR, two of which are paid before their Expected Date. The Settlement Date is the date the payment is identified in the Account Bank. Using the FIFO method for the Purchase Date, the Exchange must use the oldest ETR. This means that in practical terms that although the payment on two of the ETR was before the Expected Date, the Exchange sets the Purchase Date for all three as the same date. Using the Purchase Date set by the Exchange, this is subtracted from the Settlement Date to give the DSO. The Reserve is then calculated based on this DSO. In this example, in real terms it is possible that two of the ETR that were paid early, were calculated as being outstanding for longer than they actually were. If there is an over/under payment to the Originator, this can be adjusted when the Originator submits an agreed reconciliation for the account.

Further details that support this Cash Balance Policy and explain how to read and understand Exchange statements and communicate transactions to the Exchange can be found in the Exchange Reconciliations reference section. The Exchange Transaction Manual is a supporting document that should also be read to gain a complete understanding of Exchange Trading and Settlement policies.

In accordance with the Credebt Exchange® Master Agreement, and as defined therein, this is a Credebt Exchange® Document. All Originator and Agent Members of the Exchange are bound by all of the provisions contained in this Document. THIS IS AN IMPORTANT DOCUMENT AND IT SHOULD BE READ CAREFULLY TO ENSURE COMPLETE UNDERSTANDING PRIOR TO ACCEPTING ANY RSA OFFER. If you have any queries in relation to this Document, the online form is the most efficient way to contact us with any queries.

Payment Policy

The Credebt Exchange® Payments Policy uses the trading industry standard of Tomorrow or the Next Day [TomNext] on all ETR Trades received before 01:00PM today (where ‘today’ is a business day). Unless Same-Day payment (at a cost of €17.50) is specifically requested by the Originator, all Purchase Price and Reserve payments are TomNext. Please allow at least 72 hours for all TomNext payments to be processed before reporting a payment as ‘missing’. Some banks do not process payments as efficiently as others. As indicated on the Provisional RSA Offer, or the Formal RSA Offer if provided and whichever is the most current, a Trade Commission charge is automatically deducted from every payment transfer to an Originator, regardless of value.

Additionally and in accordance with the Credebt Exchange® Master Agreement, each Member shall immediately pay to Credebt Exchange® the amount of any payment that Credebt Exchange® may have previously made to the Member, and which Credebt Exchange®, in its administrative capacity, determines should or must be reversed. The Member shall pay such amounts to Credebt Exchange® immediately following demand, without any ability to dispute such payment, which right is hereby waived. The Member further agrees that Credebt Exchange® may setup or initiate transfers out of the Member Collection Account, or from the Member Payment Account, to pay such amounts owed to Credebt Exchange®, or alternatively, Credebt Exchange® may set-off the amount so owed against any sum that may then or thereafter be owed to the Member.

Reserve Policy

In accordance with the Credebt Exchange® Master Agreement, the Originator’s entitlement to any Reserve is at the discretion of Credebt Exchange®. All Reserve payments must be agreed on, or before, the Maximum Maturity Date. Reserve payments not agreed prior to the Maximum Maturity Date, automatically expire and no Reserve payment is due.

High-Risk Debtors are Debtors with any bad credit rating from a Rating Agency. Traded ETR from High-Risk Debtors, will affect all Reserve payments to the Originator. The Face Value of all Traded ETR from all High-Risk Debtors that are not Settled are deducted from any Reserve payment. Originators trade in High-Risk Debtor ETR at their own risk.

High-Risk ETR are Traded ETR purchased close to, or after, the Maximum Maturity Date. High-Risk ETR, will affect all Reserve payments to the Originator. The Face Value of all High-Risk ETR that are not Settled are deducted from any Reserve payment. Originators trade in High-Risk ETR at their own risk.

For any Originator that is a Debtor of another Originator, any amount payable by the Debtor to the Originator may be set-off by Credebt Exchange® against any amount payable by the Exchange to that Originator.

Reserve payments to Originator’s that opt to have Credebt Exchange® undertake a Buy-Out (i.e. purchase all outstanding invoices and fees from an IDF provider) are only made when the total amount outstanding is less than the Buy-Out value. For example, if the Buy-Out cost was €500,000 then Reserve payments commence after the initial Buy-Out cost of €500,000 is paid in full.

There are two ways to trade and sell your invoices/ETR in multiple currencies:

• Sell in one currency & get Settled (i.e. paid in full by the Debtor) in another
• Sell & Settle in the same currency

 

Credebt Exchange® operates in multiple currencies but does not offer Foreign Exchange [FX] hedging, or FX swaps. Any Originator that sells ETR in one currency and settles in another must consider their FX exposure. For example, if the GBP/EUR FX rate is 1.2000 and the Face Value of an ETR is £ 10,000 seeking payment in EUR, at a Purchase Price of 90.000%, £ 9,000 is paid as € 10,800 to the Originator once it is sold.

When the ETR is Settled, after fees, if the balance due is 9.000% this equates to a £ 900.00 balance. If the FX rate on the Settled Date is still GBP/EUR 1.2000, then €1,080 is paid. However if GBP/EUR is 1.1000 then only €200.00 is paid. This is because the FX rate has ‘moved against’ the Originator and the value of the original payment must be considered (and reduced) from the payment to settle the trade.

To avoid FX exposure, Originators should consider setting up a foreign exchange bank account so that the Sell & Settle occurs in the same currency. This avoids FX exposure on trading but may result in higher FX losses when moving money from this foreign exchange bank account to the local currency bank account.

If at all possible, Originators should try to Sell & Settle in their local currency. This is an obvious solution but many customers will not accept or pay invoices in foreign currencies. The purpose of this article is to highlight the issues surrounding cross-border trading where different currencies are used.

Related articles

• How to learn Forex Trading for Beginners
• What Is Foreign Exchange (Forex)?

 

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

An Originator that has completed their enquiry, received and confirmed their RSA Offer and are an authorised Member of the Exchange, can originate Traded ETR in three simple steps. If you are a new user of the Exchange, it is recommended that you read the comprehensive Originator Trading Instructions. As an experienced user, the three steps are:

• Create new Debtor
• Open a Trade
• Upload Revolving ETR

 
Create new Debtor

To add a new Debtor to an Originator account, login to the Exchange Trade Centre | Dash Board and use the Create new Debtor link on the left side of the Exchange Trade Centre | Dash Board. Once this form is submitted allow up to 72 hours for this Debtor to be approved and authorised for trading. There is no need to contact the Trade Desk during this 72-hour period, Debtors will be automatically approved in accordance with the Credebt Exchange® Service Level Agreement [SLA].

Before any trading in ETR can occur, the Debtors status must be indicated as: Authorised. Debtor Status can be viewed using the My Debtors link on the left side of the Exchange Trade Centre | Dash Board. If the Debtor is not authorised on, or before, 72 hours, use the Support form to submit an enquiry to the Trade Desk.

Open a Trade

On condition that the Debtor status is Authorised, use the ‘View’ button on the left side of the Debtor name and check the value that has been entered opposite the Predicted Annual Debtor Revenue for this Debtor.

Using the Open a Trade link on the left side of the Exchange Trade Centre | Dash Board, you must now enter a Revolving ETR for this Debtor. On this Open a Trade form, you will enter the figure from the Predicted Annual Debtor Revenue in the Total Face Value of ETR field. Then enter the number of invoices you expect to issue over the number of months you intend. If you have a supporting document such as a contract, sales order or other documentation, use the Attach Supporting Document as shown in the screenshot below:

 
Upload Revolving ETR

Once the Open a Trade form has been submitted, the Upload Revolving ETR link on the left side of the Exchange Trade Centre | Dash Board is then used to submit each invoice that is to be traded and sold on the Trade Floor as shown in the screenshot below:

 

Before any invoice from any customer/Debtor can be traded and sold on Credebt Exchange®, a Notice of Intent [NoI] letter must be issued. This is a one-time-only event (i.e. it does not occur repeatedly) and the notification process is simple:

Firstly, you create the letter using the Notice of Intent [NoI] Template. Once prepared, the simplest and most effective way is to issue the NoI as a PDF in an email. When sending this by email, please ensure that you use the following instructions:

• Send the email to your contact at the Debtor company
• This is a suggested email subject line: ####### NoI APPROVAL #######
• CC the email to: tradedesk@credebtexchange.com
• Ask the recipient (i.e. your contact in the Debtor Company) to reply using the following suggested text:

  “….on receipt of this email, please confirm that this notice is acceptable to you and that there is no issue in our new requirement that payments be made to Credebt Exchange®. When confirming your agreement, please Reply All”

  …or some other similar wording.

• In the absence of any response, it is advisable to re-send a reminder email within a few days.

 
Using the above approach will mean that you/we don’t need to call/email the Debtor again.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

There are two types of customers you will have: existing customers that you have been selling to for some time and new customers. For existing customers please use the instructions below and upload their experience. Follow the New Debtor steps below to enter any new customers/Debtors.

All Debtors should have a Debtor Experience file stored on the system. Debtor credit limits are set by combining ETR trading with previous Debtor Experience (also called Debtor statement, or Debtor account history). This file is simple to create by exporting the Debtor Experience from your accounting system in .CSV, .XLS or .XLSX format. Once the data is taken from your accounting system, use this XLSX Template and follow the instructions below to correctly format the file before uploading it.

If you have existing Debtors and wish to see if the Debtor Experience has been uploaded, simply go to the My Debtors menu item in the Exchange Trade Centre and use the ‘View’ button for the specific Debtor. If Debtors Experience is present, there will be a blue hyperlink on the top right corner that reads: ‘View Trading History’. If no Debtors Experience is present, there will be a blue hyperlink on the top right corner that reads: ‘Upload Debtor Experience File’.

New Debtor

To enter a new Debtor, use the Create new Debtor interface that is accessed directly from the Originator Dashboard using the yellow ‘Create New Debtor’ button, or from the left side menu: My Debtors -> Create new Debtor. Follow the on screen instructions to complete all required fields and, before submitting the form, you must use the grey ‘Choose File’ button to upload an XLSX file for the Debtor.

For new customers/Debtors that you have not previously traded with, download the Blank Experience Template and without making any changes to this file, use this when creating a new Debtor. For existing customers/Debtors download the Experience XLSX Template and enter your previous sales and payments experience in the Debtor-Experience-Upload.xlsx template.

IMPORTANT:- You will not be able to create a Debtor unless the Debtor-Experience-Upload.xlsx is in the correct format. Also, even if the Debtor you are entering is a new Debtor, and you have not traded with this Debtor before, you must upload a Debtor-Experience-Upload.xlsx with no values in any of the fields, as explained below.

Debtor Experience (also called Debtor statement, or Debtor account history) is a list of invoices, payments/receipts and credit notes/discounts. For invoices, enter the two letters: SI and for a payment received from the Debtor, use the two letters: SR and finally for a discount and/or credit note transactions, use the two letters: SC. Most accounts systems are capable of exporting the transaction data for any Debtor into XLS, or XLSX format. Once it is exported, copy and paste the data into the Debtor-Experience-Upload.xlsx file using the instructions below.

IMPORTANT:- If you are copying data into the Debtor-Experience-Upload.xlsx template, to avoid errors, use the Copy & Past Special method to ensure you do not overwrite the template’s formatting.

The Debtor-Experience-Upload.xlsx template, has five headings in row 1 (do not remove these headings). If the Debtor you are creating is a new Debtor (and you have no transactions for this Debtor), you must still upload a Debtor-Experience-Upload.xlsx with no values in any of the fields. The column headings are explained as follows:

• Type – in these cells, specify the type of transaction SI, SR or SC (as explained above)

• Number – in these cells, enter the invoice number, the credit note reference, payment receipt code or other information for the specific transaction

• Date – in these cells, enter the date in the format YYYY-MM-DD (where YYYY is the four digits in the year, MM represents the two digits for the month and DD is the two digit date)

• Branch – in these cells, enter the branch, or division of your business that originated the transaction. If you’re unsure what to enter here, leave these cells blank

• Total – in these cells, enter the face value, or total value, of the invoice, payment, or credit note

IMPORTANT:- When all the Debtor transactions are correctly entered into the file, you must delete the red text instructions in column F of the Debtor-Experience-Upload.xlsx template. Otherwise the system will return an error.

When the file is completed, with column F removed, use the yellow ‘Create’ button to submit the form. If the file is incorrectly formatted, the system will return an error. Re-read the above instructions and try again until it is successfully submitted.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Once you have received your digital certificate and have logged in to the Exchange Trade Centre | Dash Board, you should begin by completing the Originator Application process. Before you can use any part of the system, your organisation details are required and if you try and access any of the menu items or buttons on the Exchange Trade Centre | Dash Board, you will be prompted to begin the process with the following check-list:

Organisation Check List

The purpose of this screen is to assist you in making sure you have all the details you need to complete the Originator Application process. Once you have all the information available, check each check box on the Originator Application Checklist and click the ‘Save & Continue’ button at the bottom of the page to begin the process.
 

Regularly we are asked about the Notice of Intent [NoI]. This is an introduction letter that explains who Credebt Exchange® are and why you’ve chosen to partner with us. The Notice of Assignment [NoA&#93 is a separate letter that is attached to each and every invoice/ETR when it is being sent to your Debtors/customers. The Notice of Intent/NoI letter is only sent once to the Debtor/customer and is not sent again.

Many of the recipients of the NoI do not reply to the letter and there’s nothing you as the Originator, or indeed Credebt Exchange®, can do to change this. Our processes and procedures consider this real world fact and simply issuing the NoI, with no response from the customer/Debtor is sufficient. What usually happens is the Debtor simply changes the bank details on the Originator account from their previous bank details to the Credebt Exchange® bank account details and you don’t know about it until payment’s are received.

Regarding the Notice of Assignment/NoA, this is automatically sent with every invoice/ETR. There is no action required by you as the Originator, this happens when you submit the ETR to the Trade Floor. The ETR is stamped and sent to the Debtor contact you entered when entering the Debtor’s information on the Exchange. Your Debtor contact receives your invoice by email (or by post) and the NoA is simply attached at the end. As stated, this happens automatically and doesn’t require any action on the part of the Originator.

For more details read the Notice of Intent [NoI] article.
 

Many Originators with Invoice Discounting/Factoring [IDF] ask Credebt Exchange® to Buy-Out their contract so that they can completely dispense with their current provider. The current IDF provider owns the Debtor ‘book’ because they have advanced money to the Originator based on the total Face Value of all the invoices in that book. To conduct a Buy-Out, the Originator must agree the Buy-Out price with the IDF provider and then asks Credebt Exchange® to pay it.

As the new owner of all of the invoices in that book, Credebt Exchange® treats them as if they were original Exchange Traded Receivables [ETR], purchased under a Revolving Sale Agreement [RSA]. All invoices/ETR that are purchased using an RSA are bought at the Purchase Price specified in the RSA. The Purchase Price is based on the Face Value of the ETR less the applicable monthly Discount. The difference between the Purchase Price paid for an ETR on the date that it is purchased and the final amount paid to the Originator when the invoice/ETR is Settled (i.e. paid in full), is called the Reserve.

Taking an example of an Originator being charged 1.000% interest per month on a book valued at 1.0m, the IDF provider may have lent 60%, or 0.6m, of its value to that Originator. The Originator subsequently agrees an RSA with Credebt Exchange® with a Purchase Price of 90% and a monthly Discount of 0.875%. The Originator asks Credebt Exchange® to Buy-Out the current IDF provider, by paying the total amount outstanding, plus other fees that the IDF provider may request (e.g. interest, service and other charges). For the illustrative purposes, let’s assume that the total Buy-Out cost is agreed at 622,000.

Description	IDF Provider		Credebt Exchange®
Total Book Value	1,000,000		1,000,000
Amount lent	600,000
Interest Fees, etc	22,000		15,750
Sub-Total	622,000
RSA			900,000
Balance/Reserve	340,000		100,000
Interest	22,000		15,750
Originator Total	978,000		984,250

 

The Buy-Out payment to the IDF provider is 622,000 or 62.2% of the value of the Originator book worth 1.0m. However, under the terms of the RSA, the Purchase Price is 90%, so the there is a difference of 27.8% between the RSA Purchase Price of 90% and the 62.2% lent by the IDF provider (and paid by Credebt Exchange®). This difference of 27.8% is placed in the Reserve for each of the ETR purchased from the IDF provider. Payment of the 27.8% is added to the Reserve amount payable to the Originator as each ETR is Settled.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Credebt Exchange® aims to be clear and transparent on the how it deducts charges (i.e. fees and commissions) from payments to any Member account.   Before examining any deductions from a Member account, the Originator should log in to their account and view the Important Information items listed on the Exchange Trade Centre | Dash Board (access to the Exchange Trade Centre is restricted to Members only) The information provided here is required reading.

There is also additional information in all of the articles in the Credebt Exchange® Tips & Help public section of this web site.   If any aspect of what is documented is not clear, Originators are invited to submit questions to Support using the Support & Customer Care Form.  Questions submitted using this form are regularly added to the Frequently Asked Questions, or FAQ, section of this web site.

Combining the Frequently Asked Questions, the articles contained in this section, the Credebt Exchange® Tips & Help and the Exchange Trade Centre | Dash Board with the documentation sent to all Originator Members, should provide a comprehensive understanding of the service.  Originators and all Members are encouraged to communicate their views to the Customer Care Team.

The most efficient way to communicate with Credebt Exchange® is by using the Support & Customer Care Form.  All submissions are responded to within 24-72 hours.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Credebt Exchange® aims to be clear and transparent on the how it deducts charges (i.e. fees and commissions) from payments to any Member account.   Before examining any deductions from a Member account, the Originator should log in to their account and view the Important Information items listed on the Exchange Trade Centre | Dash Board (access to the Exchange Trade Centre is restricted to Members only) The information provided here is required reading.

There is also additional information in all of the articles in the Credebt Exchange® Tips & Help public section of this web site.   If any aspect of what is documented is not clear, Originators are invited to submit questions to Support using the Support & Customer Care Form.  Questions submitted using this form are regularly added to the Frequently Asked Questions, or FAQ, section of this web site.

Combining the Frequently Asked Questions, the articles contained in this section, the Credebt Exchange® Tips & Help and the Exchange Trade Centre | Dash Board with the documentation sent to all Originator Members, should provide a comprehensive understanding of the service.  Originators and all Members are encouraged to communicate their views to the Customer Care Team.

The most efficient way to communicate with Credebt Exchange® is by using the Support & Customer Care Form.  All submissions are responded to within 24-72 hours.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Once you have read and understood the article that explains the Credebt Exchange® charges, understanding the true cost of funds is very simple. Login to the Exchange Trade Centre | Dash Board and select the Transaction Statement menu item from the left side menu. The Transaction Statement shows the overall cost of funds for each Debtor and the Exchange Statement for the specific Debtor shows the actual cost of funds for each ETR Trade.

Taking the simple example of an invoice/ETR with a Face Value of €10,000 with an Expected Date 60-days later, where the Originator has agreed an RSA with a 90% Purchase Price and 0.875% discount per month. In the example below, under the Fee/Trade column on the Transaction Statement the Purchase Price of 90% is shown as being paid to the Originator for the Traded ETR, i.e. €9,000.00 less the processing commission, or €8,997.50.

 

In the example above, under the Reserve column on the Transaction Statement the amount due when the ETR is Settled will be €822.50. When the ETR was purchased, 90% was paid and this leaves a balance of €1,000.00 on the Face Value of the ETR. When the ETR is Settled, a portion of this balance, called the Reserve, is payable to the Originator. The Reserve can be calculated by multiplying €10,000.00 by 0.875% which equals €87.50 and because this is a 60-day ETR, the discount charge will be €87.50 by 2 (to represent the two months the ETR outstanding), or €175.00.

When paying the Reserve to the Originator, the processing commission is automatically deducted. Therefore, to calculate the cost of funds in this example, the Originator takes the Face Value of €10,000 and subtracts the Purchase Price of € 8,997.50 and the Reserve of €822.50 to get the total cost of €180.00 as seen below:

Total Cost of Funds = Face Value – Purchase Price – Reserve

180 = 10,000.00 – 8,997.50 – 822.50

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

In accordance with the Credebt Exchange® Master Agreement sub section 6.13: “The Account Bank will draw any fees and/or commissions that the Member owes to Credebt Exchange® from the relevant Member Account. Credebt Exchange will provide the Member with an electronic invoice of such fees to the Member.” Sub section 6.13 also states: “In the event that a Member does not pay all amounts owed to Credebt Exchange, Credebt Exchange shall have the right to set-off any amounts then owed by the Member to Credebt Exchange against any amounts then or thereafter due to the Member and/or Credebt Exchange shall have the right to deduct any outstanding amounts due to Credebt Exchange from any Collections in respect of a Traded ETR, or from the Member Account, in respect of that Member.”

Fees are liable for VAT and electronic invoices are issued for each charge that may include a:

• Arrangement Fee – one-time setup charge for arranging Membership as indicted on the RSA Offer
• Debtors Ratings Fee – €11.75 charge for checking each Debtor’s credit rating when requesting an RSA Offer
• Digital Certificate Fee – annual digital certificate charge as indicted on the RSA Offer
• Membership Fee – monthly charge for Exchange Membership as indicted on the RSA Offer
• Posting Fee – discretionary charge per posted ETR as indicted on the RSA Offer
• Collection Charges – discretionary charge for providing credit management and/or debt collection services

 
Fees are charged on the first ETR sales transaction conducted by the Originator each month. In the absence of any sale of ETR in any month, in accordance with the Credebt Exchange® Master Agreement, fees may be deducted from ETR Settlement or Reserve payments. To view specific RSA Offer(s) and invoices for all fees charged on a Member account, login to the Exchange Trade Centre | Dash Board and use the My Reports link on the left side of the Exchange Trade Centre | Dash Board.

All ETR trading is subject to the Discount and Commissions specified in the RSA Offer. The total Discount is easily calculated as explained in the Calculate the Cost of Funds article. Neither the Discount nor the Commissions are liable for VAT and no invoice is required because these are an integral part of the Purchase Price and the Reserve calculations. These are automatically deducted from transaction payments and may include a:

• Processing Commission – deducted from the Purchase Price, Reserve and other payments due
• Trade Commission – deducted from every payment transferred to the Originator
• Over Allocation Commission – discretionary surcharge for substantial underutilisation of allocated funds

 

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

In accordance with the Credebt Exchange® Master Agreement sub section 6.13: “The Account Bank will draw any fees and/or commissions that the Member owes to Credebt Exchange® from the relevant Member Account. Credebt Exchange will provide the Member with an electronic invoice of such fees to the Member.” Sub section 6.13 also states: “In the event that a Member does not pay all amounts owed to Credebt Exchange, Credebt Exchange shall have the right to set-off any amounts then owed by the Member to Credebt Exchange against any amounts then or thereafter due to the Member and/or Credebt Exchange shall have the right to deduct any outstanding amounts due to Credebt Exchange from any Collections in respect of a Traded ETR, or from the Member Account, in respect of that Member.”

Fees are liable for VAT and electronic invoices are issued for each charge that may include a:

• Arrangement Fee – one-time setup charge for arranging Membership as indicted on the RSA Offer
• Debtors Ratings Fee – €11.75 charge for checking each Debtor’s credit rating when requesting an RSA Offer
• Digital Certificate Fee – annual digital certificate charge as indicted on the RSA Offer
• Membership Fee – monthly charge for Exchange Membership as indicted on the RSA Offer
• Posting Fee – discretionary charge per posted ETR as indicted on the RSA Offer
• Collection Charges – discretionary charge for providing credit management and/or debt collection services

 
Fees are charged on the first ETR sales transaction conducted by the Originator each month. In the absence of any sale of ETR in any month, in accordance with the Credebt Exchange® Master Agreement, fees may be deducted from ETR Settlement or Reserve payments. To view specific RSA Offer(s) and invoices for all fees charged on a Member account, login to the Exchange Trade Centre | Dash Board and use the My Reports link on the left side of the Exchange Trade Centre | Dash Board.

All ETR trading is subject to the Discount and Commissions specified in the RSA Offer. The total Discount is easily calculated as explained in the Calculate the Cost of Funds article. Neither the Discount nor the Commissions are liable for VAT and no invoice is required because these are an integral part of the Purchase Price and the Reserve calculations. These are automatically deducted from transaction payments and may include a:

• Processing Commission – deducted from the Purchase Price, Reserve and other payments due
• Trade Commission – deducted from every payment transferred to the Originator
• Over Allocation Commission – discretionary surcharge for substantial underutilisation of allocated funds

 

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

In many instances there is more than one user in an Originator organisation that requires access to the Exchange Trade Centre. To add a new Debtor, use the Add new User interface that is accessed directly from the Originator Dashboard using the yellow ‘Add new User’ menu item from the left side menu: My Organisation -> Add new User.

When this form is submitted, the new user receives an email inviting them to complete a simple form and submit it. Once the request is approved, the user will receive a second email to complete the process. Once completed, they too will have access to the Exchange Trade Centre.

IMPORTANT:- The new use must complete both forms using the same web same browser, otherwise their digital certificate will not work and they will not be able to access the Exchange Trade Centre.

IMPORTANT:- Some links in this article will only be accessible to authorised Members that have logged into the Exchange Trade Centre

Regularly, Originators need to merge multiple invoices/ETR into a single PDF document, prior to uploading using the Open a Trade section of the Exchange Trade Centre. Similarly, there are other instances where multiple invoice/ETR must be split into individual files so that there is a single PDF for each invoice.

Credebt Exchange® does not offer, nor recommend the open source PDFSam PDF Split and Merge Basic software but does suggest that Originator users examine this software and determine if this is suitable for their needs. This software is issued under the GNU General Public License, version 2 (GPLv2) and therefore is free to use. It can be downloaded from here:

PDF Split and Merge Basic

Once downloaded, use these links for instructions on how to use PDF Split and Merge Basic:

• Split PDF
• Merge PDF
• Frequently Asked Questions [FAQ]

When viewing PDF documents on the Exchange using the Firefox browser, the document may not display properly. To fix this go to Tools -> Options -> Applications and then scroll down to the Portable Document Format (PDF) item in the list and select the option ‘Use Adobe Acrobat (in Firefox)’ as shown in the image below: