A report by Moody's says lax accounting requirements for reverse factoring arrangements helped mask the U.K. firm's deteriorating financial condition.
Supply chain financing lets companies stretch payment terms without hurting their suppliers’ cash flow.
Supply chain finance instruments such as reverse factoring helped make it possible for Unilever to extend payment terms without punishing suppliers.
Reverse factoring can raise the risk profile of supply chains to dangerous levels, and could even cause a systematic financial failure.
