Central settlement

Central settlement refers to the processing of liabilities from purchase contracts by a central office. When the cash discount is due , collected claims are paid in one sum to the vendor .

Del credere is often used in the context of central settlement . In practice, a distinction is made between central settlement with and without del credere. However, the central regulatory body does not acquire the debtor's liabilities in the course of payment processing.

functionality

The central settlement takes on the function of a billing system, mostly to organize the payment flows between suppliers and members of purchasing groups. The member orders the goods directly from the supplier, who in turn makes the delivery directly.

The purchasing group is linked to the member through a membership or partnership agreement, the supplier through a central settlement agreement. The purchase contract between the member and a supplier is the starting point for the processing of the liabilities that have arisen, the purchasing group now either assumes a guarantee for the member or joins the claim by assuming liability and is therefore also liable to the member; The member and the purchasing group become joint and several debtors. The liabilities of the individual members are totaled and paid when the discount is due.

This triangular relationship changes with the additional involvement of a del credere giver. The latter concludes contracts with the member and the contract supplier in order to secure the risk of the member's insolvency.

In the event of a member defaulting on payment, the suppliers are paid by the central regulator. When the supplier pays, the claim is regularly transferred to the central regulator. In the case of the assumption of debt, this transfer of claims takes place in accordance with Section 426 (2) BGB (cessio legis). A legal transfer of claims to the central regulator takes place in accordance with Section 774 (1) of the German Civil Code (BGB), even if a guarantee is agreed. In addition, central regulators can also assign the claims from the supplier when paying as security.

Business implications

The central invoice processing results in a simplification of the business organization for the customer, which results in a gain in efficiency , at the same time there is rationalization potential through scaling effects . In addition, the constant discounting creates an indirect positive financing effect .

Strategic importance

Central regulation is of central importance in the organization of information and communication flows. The initial situation of the central settlement as a pure accounting system has been continuously expanded and is increasingly becoming a multi-level and multifunctional network. As a result, central regulation has a “focal role” in the verticalization of cooperations and purchasing groups.

The efforts to enable error-free processing within the framework of central settlement not only have an impact on payment and information flows today, but also increasingly influence distribution and logistics processes, resulting in additional potential for rationalization. The increased use of electronic data processing accelerates this tendency, whereby the connection of merchandise management systems with the central regulation is of central importance. The new role as an information and communication hub corresponds to the function of a "clearing house" .

Central regulation supports the formation of strategic networks through its function and the new technical possibilities of electronic data processing.

criticism

The fees charged for the central settlement process are often considered "too expensive" by suppliers. However, due to the demand bundled by the purchasing groups, suppliers have no alternative courses of action to participate in centralized settlement systems.

In addition, there is the accusation that there is hardly any additional security for suppliers, since even members who do not benefit from del credere protection due to poor creditworthiness can continue to participate in central settlement. Cessation of deliveries or delivery against advance payment are rare due to political pressure, members and purchasing groups.

See also

• clearing
• Factoring
• Supplier credit
• Payment term

literature

• Günter Olesch, Harald Ewig: The management of association groups. With excellent strategies to success. Paths to system leadership. Hermann Luchterhand Verlag, Cologne et al. 2003, ISBN 3-472-05236-8 .
• Theresia Theurl : Association group membership and risk. The effects of group membership on the risk situation of the member companies. Practice-oriented research project. CAWM Center for Applied Economic Research, Münster 2004, research report .
• Joachim Zentes, Bernhard Swoboda (ed.): Perspectives of central regulation. Deutscher Fachverlag, Frankfurt am Main 2001, ISBN 3-87150-761-X ( Future in Retail 16).