In this presentation Kyriba discusses the benefits of dynamic discounting programs, and how they support buyers in managing self-funded early payment discount programs for suppliers.

1. DYNAMIC DISCOUNTING AND ITS KEY BENEFITS
November 7th, 2013
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2. Product Overview
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3. Supply Chain Finance
• Payable Financing / Reverse Factoring - first in a
suite of Supply Chain Finance modules
• Dynamic Discounting
• Leverages Payment Factory and Cash Visibility
capabilities within Kyriba
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4. Details of Dynamic Discounting
• Buyer offers dynamic payment terms to its suppliers
• Should a supplier choose to be paid earlier than
term, buyer earns discount
• Buyer sets and controls the discount rate that is
dynamically calculated for entire term of invoice
• Opportunity for buyer to earn discounts on its entire
spend, not just pre-negotiated discount terms from a
small percentage of suppliers
• Allows suppliers to control payment timing and manage
their cash flows
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5. Benefits – Dynamic Discounting
Buyer
Supplier
• A valuable tool for cash
optimization - alternative for
investing short term excess
liquidity
• In control of payment
receipt, can request
payment at any point of
invoice term, depending on
working capital needs
• Earn above market, risk free
returns on annual spend by
paying suppliers in advance
• Flexibility – enable or stop early
payment options at any time
• Minimize counterparty risk from
improved financial health
through the supply chain
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• Alternate source of working
capital finance
• Visibility of approved
invoices and payments to
better manage working
capital needs
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6. •
Functional Workflow - Dynamic Discounting
Purchase order
Product delivery
Invoice
Approved invoice
Dynamic discount offer
Request for early payment
Supplier
Buyer
Supply chain finance platform
Early payment
Payment of non-discounted invoices at maturity
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7. Impact of Dynamic Discounting

8. Solutions Impacting Working Capital in S2S Space
Impact on Buyer
Solution
Working
Capital
EBIT
Process
Efficiency
Impact on Supplier
Working
Capital
EBIT
Payment Term
Management
Early Pay
Discounting
Dynamic
Discounting
Supply Chain Finance Tools
Payable Financing
Purchasing
Cards1
Optimal Purchasing
Channels
Optimal Payment
Channels2
e-Procurement
e-Invoicing
Strategic Sourcing
and Procurement
Notes: 1 Assumes monthly settlement cycle with issuing bank
2 Assumes Buyer starts with all check payments
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Positive
Neutral
Negative
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9. SCF Tools’ Benefits for Companies with $1B in spend and
100K Invoices and Payments
Financial Benefit to Buyer
Solution
Payment Term
Management
Early Pay
Discounting
Dynamic
Discounting
Payable Financing
Purchasing
Cards
Other Purchasing
Channels
Other Payment
Channels
Working Capital
Impact
Cost Reduction
($M)
6 - 12 days DPO improvement
-
2 - 3 days DPO degradation
$1.2M
5 - 8 days DPO degradation
$2.0M
12 - 20 days DPO improvement
-
2 - 3 days DPO
improvement
$0.9M
Needs further evaluation
1 - 2 days DPO degradation
$0.1M
e-Procurement
-
$0.6M
e-Invoicing
-
$0.4M
Strategic Sourcing
and Procurement
-
$2M
7 days DPO improvement
$7M
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10. Kyriba Supply Chain Finance Platform

11. Kyriba SCF Platform
• Multibank
– Enables participation from multiple funding sources
– Alleviates credit exposure issues, reduces counterparty risk
– Flexibility for buyer to choose banks per region
• Visibility
– Centralized workflow: Buyer, Supplier, Bank
– Provides real-time visibility to invoices approved for payment
by buyer, to suppliers and banks
• Ease of Use
– Easy to work with multiple banks as well as with one bank
– Encourages onboarding of suppliers
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12. Kyriba SCF Platform
Integrates with Treasury
• Cash forecasts to optimize working capital decision making
• Payment of financed and non-financed invoices from one platform
Integrated SCF Solution
• Administer a global Dynamic Discounting and Payable financing
solution, on one integrated platform
Scalable
• Improve productivity so that program can expand (but team
doesn’t have to):
•
•
•
•
Bank connections
ERP Integration
Global Reach
Web-based
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13. Kyriba SCF Platform
Access by all parties:
• Buyers
• Suppliers
• Financial Partners
Integration with
Treasury Workflow:
• Cash Forecast
• Payments
Import
from
ERPs
Export
Finance
Request
Buyer
Financial
Partners
Suppliers
Forecast
Creation
Payment
Creation
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14. Additional Resources
Treasury Management Systems and SCF white paper
http://goo.gl/YceL3P
SCF Payable and Receivable Solutions guide
http://goo.gl/byNxPA
Improving Working Capital infographic
http://goo.gl/LTIY1c
Kyriba Trade Solutions fact sheet
http://goo.gl/AbYm2f
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15. Contact Kyriba
kyriba.com/blog
twitter.com/kyribacorp
linkedin.com/company/kyriba-corporation
facebook.com/kyribacorp
slideshare.com/kyriba
youtube.com/kyribacorp
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