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<h1>WCNs Explained: What Are Working Capital Notes?</h1> <p><strong>WCNs</strong> (Working Capital Notes™) are digital negotiable instruments that help businesses unlock cash tied up in day-to-day trade cycles. Put simply: a Working Capital Note turns a payment obligation (or a receivable) into a financeable note that can be digitally issued, signed, transferred, and settled with full auditability — so liquidity moves faster without forcing a business to rewrite its underlying terms of trade.</p> <p>In practice, WCNs sit at the intersection of treasury, trade execution, and supply chain liquidity. They are designed for real operational use: issued from verified trade data, managed through a controlled lifecycle, and structured to be transferable and enforceable as a negotiable instrument. To see the official overview, start with <a href="https://etr.digital/insights/what-are-working-capital-notes">What are Working Capital Notes</a>.</p> <h2>What problem do WCNs solve in working capital?</h2> <p>Most working capital friction isn’t caused by a lack of funding — it’s caused by slow, manual, paper-heavy processes and fragmented data across invoicing, approvals, settlement, and financing. That friction shows up as trapped liquidity, longer cash conversion cycles, and more time spent chasing documents instead of managing risk and forecasting cash.</p> <p>WCNs address that by converting the trade event into a <em>digitally enforceable</em> instrument that can be financed and transferred efficiently. This supports quicker access to liquidity, clearer execution status, and stronger operational controls — especially when the workflow is digitised end-to-end. For context on the wider shift, see <a href="https://etr.digital/insights/digitisation-working-capital-economics">Digitisation of working capital economics</a>.</p> <h2>How do WCNs work?</h2> <p>While structures vary by use case, the core flow is consistent:</p> <ul> <li><strong>Trade data is approved</strong> (e.g., invoice acceptance, purchase order milestones, or delivery confirmation).</li> <li><strong>A WCN is issued digitally</strong> as a negotiable instrument, with the right parties executing digital signatures.</li> <li><strong>The WCN can be transferred</strong> to a liquidity provider (bank, fund, or other financier) as a financeable asset.</li> <li><strong>Funds move earlier</strong> to the supplier (or to the originator), while the buyer settles at maturity.</li> <li><strong>The instrument lifecycle is tracked</strong> with a clear audit trail from issuance to settlement.</li> </ul> <p>This is where digital execution matters. Replacing paper with a secure digital workflow can reduce manual handling, shorten processing time, and improve visibility across stakeholders. If you want to understand the mechanics behind digitising the instrument itself, read <a href="https://etr.digital/insights/digital-negotiable-instruments-dni">Digital Negotiable Instruments (DNIs)</a>.</p> <h2>Are WCNs the same as invoices, factoring, or supply chain finance?</h2> <p>No — and the differences matter for treasury teams.</p> <p>An invoice is a claim and a record of a trade event; it is not designed as a negotiable, transferable instrument. Factoring and invoice discounting finance the invoice (often with eligibility limits, haircut levels, and operational overhead). Supply chain finance programmes typically require structured onboarding and bank-led programme mechanics.</p> <p>WCNs, by contrast, are designed as <strong>negotiable instruments</strong> in digital form — meaning they can be created, transferred, and settled in a controlled lifecycle as an enforceable asset. They can support payables finance, receivables finance, and broader trade-linked liquidity strategies, depending on how they’re structured.</p> <h3>Comparison: WCNs vs common working capital tools</h3> <ul> <li><strong>Invoice finance:</strong> financing is linked to invoices and often includes advance rate haircuts and operational checks.</li> <li><strong>Supply chain finance:</strong> programme-based, often bank-led, with onboarding and eligibility frameworks.</li> <li><strong>WCNs:</strong> digitised negotiable instruments that are transferable and lifecycle-managed, designed to reduce friction and improve liquidity velocity.</li> </ul> <p>For a deeper look at a closely related building block, see <a href="https://etr.digital/insights/digital-promissory-note">Digital Promissory Note</a>.</p> <h2>Where do WCNs fit: payables finance, receivables finance, or both?</h2> <p><strong>Both.</strong> The most common use cases map to either payables or receivables workflows — but the key value is the same: convert slow trade cycles into financeable digital instruments that move liquidity earlier while improving control and auditability.</p> <ul> <li><strong>Payables finance:</strong> a buyer supports early payment to suppliers while settling the note at maturity, improving supplier experience and stabilising supply chains.</li> <li><strong>Receivables finance:</strong> a supplier accelerates cash inflow by transferring a digitally executed instrument to a financier.</li> </ul> <p>For how digital bills of exchange support receivables settlement structures, see <a href="https://etr.digital/insights/digital-bill-of-exchange">Digital Bill of Exchange</a>.</p> <h2>How do WCNs improve treasury KPIs?</h2> <p>Used strategically, WCNs can support improvements in the metrics treasurers are measured on:</p> <ul> <li><strong>DSO:</strong> by accelerating cash inflows through faster execution and earlier liquidity access.</li> <li><strong>DPO:</strong> by enabling structured settlement at maturity while suppliers can be paid earlier via financing.</li> <li><strong>Cash Conversion Cycle:</strong> by reducing the time cash is trapped between approvals, settlement, and funding cycles.</li> </ul> <p>To quantify where cash is stuck in your own cycle, use <a href="https://etr.digital/calculator">ETR Digital’s Cash Conversion Cycle Calculator</a>.</p> <h2>What makes WCNs “digital” in a meaningful way?</h2> <p>Digitisation isn’t just converting a PDF into an email attachment. The material gains come from:</p> <ul> <li><strong>Secure execution and enforceability</strong> (digital signatures, controlled issuance, and lifecycle integrity).</li> <li><strong>Transferability</strong> with real-time status and ownership visibility.</li> <li><strong>Auditability</strong> across every action, party, and state change.</li> <li><strong>Operational integration</strong> so teams don’t need to reinvent workflows to adopt the instrument.</li> </ul> <p>ETR Digital operationalises this through its platform approach to issuing and managing digital negotiable instruments — explained in <a href="https://etr.digital/flownote">Flownote</a> and explored in more detail in <a href="https://etr.digital/insights/what-is-flownote-trade-finance">What is Flownote in trade finance?</a>.</p> <h2>Real-world example: WCNs in live corporate use</h2> <p>WCNs aren’t theoretical. They are already being issued within real corporate workflows, supported by financing partners and embedded into operational execution. A recent example is Şişecam’s issuance of a Working Capital Note™ under a multi-million facility, financed by İşbank and delivered via partner workflows using ETR Digital’s technology. Read the full case update here: <a href="https://etr.digital/insights/sisecam-issues-first-working-capital-note-with-etr-digital">Şişecam issues first Working Capital Note with ETR Digital</a>.</p> <h2>FAQ: Working Capital Notes (WCNs)</h2> <h3>What does WCNs mean?</h3> <p>WCNs means <strong>Working Capital Notes™</strong> — digital negotiable instruments that convert trade obligations or receivables into financeable notes, helping businesses unlock liquidity and optimise cash flow. For the formal definition and context, see <a href="https://etr.digital/insights/what-are-working-capital-notes">What are Working Capital Notes</a>.</p> <h3>Are WCNs debt?</h3> <p>WCNs are structured as negotiable instruments linked to trade flows, and how they’re treated depends on the specific programme design, jurisdiction, accounting policies, and legal structure. In practice, they are often positioned as a way to access liquidity without relying on conventional borrowing mechanics — but treasury teams should always align with finance, legal, and auditors for treatment in their specific context.</p> <h3>Who benefits from WCNs?</h3> <p>Suppliers can access cash earlier; buyers can optimise settlement timing and strengthen supply chain stability; liquidity providers gain a digitised, trackable instrument with clearer lifecycle controls. This multi-stakeholder value is central to why digital instruments are gaining traction across modern treasury and trade execution.</p> <h3>How do I know if WCNs could help my organisation?</h3> <p>If your cash conversion cycle is being stretched by slow approvals, settlement delays, or fragmented processes, WCNs may be relevant. A practical first step is to quantify trapped cash using <a href="https://etr.digital/calculator">ETR Digital’s cash conversion cycle calculator</a>, then map where digitised issuance and transferability could remove friction.</p> <h2>Where to go next</h2> <p>If your goal is simply to understand WCNs, you’ve now got the core definition, mechanics, and use cases. If your goal is to evaluate them for real deployment, explore the broader library in <a href="https://etr.digital/insights">ETR Digital Insights</a> — then review how digitised instrument workflows can fit into your existing operating model and liquidity strategy.</p>