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Supplier finance programs

How supply-chain finance lets suppliers get paid early, and how the company still reports the payable, with Coca-Cola, Johnson & Johnson, IBM, Caterpillar and Pfizer.

The short answer

A supplier finance program (also called supply-chain finance) lets a supplier, if it chooses, sell its receivable from the company to a bank and get paid before the invoice's due date. The company still pays the bank on the original due date, usually the same date it would have paid the supplier. The company's obligation typically remains accounts payable, not bank debt, and U.S. GAAP now requires a 10-K disclosure of the program's terms and the outstanding amount.

How the program works

Coca-Cola's 2025 10-K describes the structure in one sentence: financial institutions offer a voluntary supply chain finance ("SCF") program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis. Pfizer's 2025 10-K says participating suppliers may voluntarily elect to sell their accounts receivable with Pfizer to these financial institutions. Johnson & Johnson's 10-K for the year ended December 28, 2025 adds that the company has agreements for supplier finance programs with third-party financial institutions, and that the company is not a party to the arrangements between the suppliers and those institutions.

Source: Coca-Cola 10-K for fiscal 2025, filed Feb 20, 2026 · Pfizer 10-K for fiscal 2025, filed Feb 26, 2026 · Johnson & Johnson 10-K for fiscal 2025, filed Feb 11, 2026

The supplier decides whether to sell the invoice. The company confirms the payable and, when the due date arrives, pays the financial institution the amount of the invoice. IBM's 2025 10-K says it agrees to pay the financial institutions the stated amounts of invoices from participating suppliers on the originally invoiced maturity date. The early payment the supplier may receive is a transaction between the supplier and the bank, at a discount that often reflects the company's credit, not the supplier's.

How it shows up in the 10-K

The main question for a reader is whether the obligation is still a trade payable or has become a borrowing. Caterpillar's 2025 10-K says it facilitates voluntary supplier finance programs and that it accounts for the payments made under the programs, the same as its other accounts payable, as a reduction to its cash flows from operations. That presentation, which is also the one many peers describe, keeps the outstanding amount in accounts payable and the settlement in operating cash flow, rather than treating it as a financing inflow and outflow.

Source: IBM 10-K for fiscal 2025, filed Feb 24, 2026 · Caterpillar 10-K for fiscal 2025, filed Feb 13, 2026

Current U.S. GAAP requires disclosure of the key terms and the outstanding confirmed amount, usually in the payables note or a standalone supplier-finance note, with a roll-forward of the obligation. The place to look is that note, not the debt footnote, unless the company has concluded that some or all of the program should be classified as debt. Accounts payable and the cash flow statement are the related lines on the statements themselves.

Common questions

What is a supplier finance program?

An arrangement in which a supplier can sell its receivable from the company to a bank and receive payment before the invoice due date. Coca-Cola describes it as a voluntary supply-chain finance program; Pfizer and Johnson & Johnson use similar language.

Does the company borrow from the bank?

Usually not, in the way these 10-Ks describe the programs. The company pays the bank on the original invoice due date. Johnson & Johnson states that it is not a party to the arrangements between the suppliers and the financial institutions.

Where does the outstanding amount sit?

Typically in accounts payable. Caterpillar says it accounts for payments under the programs the same as its other accounts payable, as a reduction of operating cash flow. The outstanding confirmed amount is disclosed in a note.

Why do suppliers use it?

They may be paid earlier than the invoice due date, often at a financing cost that reflects the customer's credit. Participation is voluntary in the programs these companies describe.

Is this the same as stretching payables?

Not by itself. The company's due date is often the same as its ordinary payment terms, as IBM notes when it says it pays on the originally invoiced maturity date. A separate question is whether those terms themselves have changed, which the liquidity discussion or the note may address.

Disclosures

Editor holdings: The editor holds no position in any company named on this page. As of Nov 11, 2026.
Compensation: Nobody paid for this page. No affiliate links on this page.
Sources: Each company's own SEC filings, linked next to each number.
Last updated: Nov 10, 2026

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