We have placed an high value order on one equipment supplier and payment requires to be made to them only as per Purchase Order. However, subsequently, party wants to avail Invoice discounting facility with one FI (incidentally, which is our Group Company) and wants us to make the payment directly to them. For that another contract is required among supplier, us and FI. My reading is that it is not correct. Please guide me. There involves assignment of debt and duty issue.
Normally the supplier can get his invoice discounted with a Financial Institution... They give an Irrevocable Letter of Authority or a Power of Attorney in favour of the Financial Institution and you have to give your acceptance for such arrangement... On the payment day you the Financial Institution..