Advanced Discounting With Taulia. Save Millions Through your OB10 Investment

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Andrea Kathryn Williams
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1 Advanced Discounting With Taulia Save Millions Through your OB10 Investment Matthew Wright Vice President Client

2 How Taulia Fits into the Express Payments Ecosystem Taulia is an OB10 Technology Partner SAP Certified Add-On Taulia provides an SAP Certified Add-On that connects directly to OB10. Streamline your technical connection to OB10 for all transaction types: Invoices, Payment Status, PO s Another Funding Source in the Express Payments Ecosystem Use your own cash to fund early payments, and keep all the discounts given by suppliers, all presented through the OB10 portal. Activate Taulia s Advanced Discount Management Tools

3 There s a Fundamental Inefficiency in the Financial Supply Chain

4 Banks Benefit from Current Payment Inefficiency LARGE BUYER Invoice Approved on Day 5 Invoice-Net 60 SUPPLIER Invoices Customer Buyer Earns 0.5% interest until due date BANK Suppliers Factors at 20% APR

5 While SMB Suppliers Struggle to Get Cash 2011 factoring market: ~$2.6 trillion 1 Expensive financing - Factoring: ~12-25% interest - Credit Card: ~18% APR - P-Card / Credit Card: 2.5% fee - Bank debt: lengthy and difficult to obtain. Often declined as banks are deleveraging 3 Trillion 2 Trillion 1 Trillion CAGR* 25.3% 1 Source: Factors Chain International *End of year 2011 euro to dollar conversion rate used

6 There s a Never Ending Battle Between Buyer AP and Supplier AR

7 Solving The What If Game What if suppliers could check the status of their invoices online 24/7? What if suppliers could incentivize early payments? What if you could pay your suppliers less and they would thank you?

8 How Can All This Be Achieved? Advanced Discounting Hit-or-Miss Discount Sliding Scale Discount 3.0% 3.0% 2.5% 2.5% $ 2.0% 1.5% 1.0% 0.5% 2% 10 Net 30 $ 2.0% 1.5% 1.0% 0.5% $ 0% 0 10 Days 20 Days 30 Days 0% 0 10 Days 20 Days 30 Days Antiquated Discounting Dynamic Discounting

9 Taulia s Advanced Discounting Increase Discounts Across your Spend 1. Dynamic Discounts on Net Term Invoices 2. Enhance Payment Terms on Traditional Discounts 3. Activate Dynamic Payment Terms $ $ 3.0% 2.0% $ $ $ 1.0% 0.0% $

10 Dynamic Discounts for Net Term Invoices

11 Maximize Discounts Captured on Existing Discounts 3.0% 2.5% $ Hit or miss discount Early Payments are offered via the portal upon approval before the discount day 2.0% 1.5% If Discount is missed, Early Payments are offered via the portal upon approval 1.0% 0.5% $ $ 0% Days

12 Leverage Dynamic Payment Terms as Win-Win for Both Parties Example: 2 % Net 30 As Soon Example: Net 30 As Approved 3.0% Discount % 2.0% 1.4% 1.0% 0.0% Days

13 Suppliers are quite willing to offer discounts for earlier payment, but.. Only 12% of Invoices are on Discount Terms 1 Current US Payment Terms 1 Discount Terms Net Terms 12% 88% 1 Source: PayStream Advisors Survey of 200 large corporations

14 Taulia s 4 Step ETM Methodology Enterprise Terms Management No Discounts Possible Turning the dial on your Discount Spend 1) Offer Early Payments for suppliers on NET terms 2) Maximize Discount capture on invoices with discount terms 3 3) Implement Dynamic Payment Terms (DPT) as standard payment terms for all suppliers 4) Actively convert suppliers to DPT

15 How Does it Work? Solution whereby suppliers are offered early payment based on a discount rate - set by the buyer 1 Buyer sets interest rates in SAP 2 4 Payment schedule updated in SAP according to agreed terms Approved invoices are offered automatically for early Payment 3 Supplier selects payment date and accepts discount

16 Discount Potential on $2.6B Spend Opportunity Dynamic Discounts on N30 and N34 Enhanced Payment Terms 2%,14N34 Conversion of N30 and N34 to Dynamic Payment Terms Potential Discount Savings Conservative Likely Best Case $1,391,000 $2,517,000 $4,027,000 $224,000 $336,000 $404,000 $1,887,000 $3,209,000 $4,300,000 Total $3,502,000 $6,062,000 $8,731,000

17 Working Capital Requirement Opportunity Working Capital Requirements Conservative Likely Best Case Dynamic Discounts on N30 and N34 $5,795,000 $10,487,000 $16,780,000 Enhanced Payment Terms 2%,14N34 Conversion of N30 and N34 to Dynamic Payment Terms $623,000 $935,000 $1,122,000 $10,487,000 $17,829,000 $23,889,000 Total $16,905,000 $29,251,000 $41,791,000

18 Benefit to Buyers and Suppliers Buyer Earn risk-free double-digit returns on available liquidity Buyer objectives Treasury Increase returns on available cash with complete control of the program Procurement Scale discounts across 100% of supply chain and motivate suppliers to complete e-invoicing onboarding Finance P&L cost savings and accurate cash flow forecasting IT SAP certified solutions enable rapid deployment with limited drain on internal IT resources Supplier Offers suppliers a less expensive alternative to financing Supplier objectives Easy access to ad-hoc cash demands, request is as simple as a few mouse clicks. Cheaper than funding alternatives Helps to meet quarterly targets/bonus targets More convenient than funding alternatives Accelerate only what s needed

19 Early Payment Demands are Spiky

20 The Appetite for Early Payments is High

Building a Strong Foundation for Supplier Finance Unlocking Value From Your Supply Chain

Building a Strong Foundation for Supplier Finance Unlocking Value From Your Supply Chain Taulia Overview The leading SaaS provider of Supplier Self-Services, einvoicing and Supplier Financing software