Factoring and TMS: how to centralise the management of your working capital
By Simon Daller, CEO of afakto
However firmly it is asserted, the shift towards the “augmented treasurer”, a strategic analyst and co-pilot of performance, keeps running into a stubborn reality: application fragmentation. Despite ongoing modernisation efforts, the day-to-day work of a treasury department remains splintered by constant switching between the central ERP, the TMS (Treasury Management System), accounts receivable tools, credit insurers’ portals and banking platforms.
This dispersion becomes particularly critical when managing working capital financing programmes. To gain a reliable view of their factoring liquidity, the treasurer must continually reconcile a complex triptych of information: the accounting and invoicing data drawn from the ERP, the cover provided by credit insurers, and the management statements supplied by the Factors.
The priority for finance departments is therefore to achieve a drastic, pragmatic reduction in the number of interfaces, in favour of unified tools purpose-built for the job.
Why the TMS falls short: the blind spot of factoring
For more than two decades, TMSs have formed the backbone of finance departments. For traditional bank connectivity (retrieving statements and issuing payment orders), the TMS, built on the SwiftNet or EBICS protocols, performs its standardising role perfectly.
Yet this centralised architecture hits a structural limit the moment a company turns to structured financing, chief among them factoring. Two major obstacles explain this impasse:
- The absence of a universal connectivity standard. Unlike conventional bank flows governed by standardised networks, factoring has no universal exchange protocol (no dedicated SwiftNet channel, for instance). Each financial institution or Factor imposes its own file formats, update frequencies and proprietary platforms.
- The creation of liquidity silos. Unable to integrate these heterogeneous flows natively, the TMS fails to deliver a consolidated, real-time view of factoring programmes. Decisive financial data such as available drawdown, guarantee holdbacks, reserves and outstanding assigned receivables remains locked inside the Factors’ portals.
To bridge these information gaps, finance teams are forced to multiply individual logins, extract management statements by hand and carry out makeshift reconciliations. This accumulation of specialised interfaces creates genuine cognitive overload and exposes cash position monitoring to a permanent risk of error.
“It makes no sense to be forever navigating from your ERP to your TMS, sometimes even to your web banking tools, while juggling an accounts payable or procurement system on top of that. Ultimately, everything has to be centralised.”
The pragmatic answer: cutting down interfaces through a dedicated hub
Set against the all-in-one single software model, which is often too rigid to capture the operational subtlety of working capital financing, the future lies in rationalising the application ecosystem through an interconnected “best of breed” approach.
The ideal convergence, in which every functional building block would disappear entirely behind a single interface, belongs to a longer-term outlook. Today, the most effective operational response is to replace scattered applications with a dedicated, centralising platform, designed specifically to support the treasurer, CFO or credit manager in their daily tasks.
This is precisely the approach embodied by solutions specialising in the automation of factoring processes. Rather than forcing the treasurer to juggle a dozen separate logins, these platforms act as a single interconnection hub that automatically aggregates the three inseparable components of a factoring programme:
- Company’s ERP: automatic extraction of source data (invoices, credit notes, customer payment schedules) needed to assess receivable eligibility.
- Factoring institutions (Factors): automated retrieval of assignment files and management statements.
- Credit insurers: real-time synchronisation of approved limits, cover decisions and monitoring of debtors’ financial health.
Behind the scenes, through API connectors and data-processing algorithms, the platform cleanses, aggregates and reconciles these flows at high frequency. The treasurer is no longer pulled in every direction: they have a dedicated, unified and user-friendly business tool at their disposal, enabling them to manage every financing line and anticipate liquidity needs from a single point of control.
The business impact: the treasurer as guardian and arbiter of financial data
Centralising data within a unified interface frees the treasurer from the time-consuming tasks of data entry, downloading and manual reconciliation. This automation does not, however, mean the technology takes full, autonomous control.
In a department that handles real liquidity and major financial commitments, running on “autopilot” is a dangerous illusion. A technical error or a broken data flow can trigger serious operational consequences, such as payment rejections or cash shortfalls.
Within this streamlined environment, the augmented treasurer retains a central and indispensable supervisory role:
- A strategic decision-maker. Freed from manually collecting data from Factors and credit insurers, they devote their expertise to analysing variances, optimising financing costs and modelling cash trajectories.
- A risk controller. On the principle that “trust does not rule out control”, the human expert validates and refines the indicators aggregated by the tool, safeguarding the financial decisions made by senior management.
By bringing together flows that were once fragmented within a tool that is ergonomic and tailored to their needs, the treasurer gives nothing away to complexity. On the contrary, they take back control of their data.
Let’s talk about rationalising your tools at the Journées de l’AFTE
Optimising, automating and centralising the complex flows of factoring, ERP data and credit insurance within a single, unified management space is exactly what afakto does. We support mid-market companies and large groups in eliminating information silos and turning their financing programmes into a genuine lever of financial performance.
Looking to rationalise your interfaces and automate the monitoring of your liquidity?
Come and talk with the afakto team at the Journées de l’AFTE on 26 and 27 November 2026. To arrange a dedicated meeting slot at the show, contact us today at contact@afakto.com. Not attending the event? You can also book an online demo.