Business relationships often have a common cash flow shared among all parties which they would rush to collect in order to keep the wheels of the business running. Troc Circle’s Circular Netting algorithm tackles this problem by simplifying and speeding up collections; lowering debt and supporting business growth in the process.
OFFSETTING ACCOUNTS PAYABLE WITH ACCOUNTS RECEIVABLE
Invoices sent by two, three or more parties form a payment circle as shown in the left circle below. Troc Circle’s algorithm is programmed to recognize this financial circle where $5,000 can be netted out of every party’s owed amount. The result after netting is a simultaneous increase in receivables by $5,000 and decrease in payables by $5,000 for all parties in the circle, observed in the right circle below.
As a result, the number of transactions as well as the amounts of money tied up in pending transactions are reduced. Without actually moving money, Troc Circle will have decreased all working capital needed to cover expenses on time.