The Power of Complete AP Automation Webinar
 

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The Impact of Harmonious Supplier Relationships ...

The Impact of Harmonious Supplier Relationships

Imagine supplier inquiry calls into your AP department being a thing of the past. Next envision being able to automate and maximise supplier discounts.

Attend this webinar to gain insights on how to:

- Achieve the highest levels of e-invoicing adoption and onboarding
- Communicate and transact with your supplier network in real-time
- Engage new technologies to achieve 100% e-invoicing with all your suppliers
- Complete AP automation cycle with savings opportunities through dynamic payment terms
- Become more profitable by paying suppliers early in exchange for a discount
- Automate accounts payable with case studies presented

Presenters:
Christian Hjorth, Chief Commercial Officer, Tradeshift
Joe Hyland, Global Head of Marketing, Taulia

http://tradeshift.com/enterprise/events/

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  • WelcomeThanks for comingSpeaker presentation
  • Time consuming communication with suppliers (lack of supplier visibility)
  • You could enforce your procurement process though invoice validation (xx % of inv go through touchless)
  • So, how do Buyers convert net payment terms to a a sliding scale, ASAP (as soon as possible) terms?1) “First”, You enable the Buyer to define an interest rate for InstantPayments, meaning payments before the invoice is due. Generally, such interest rate are lower than the supplier's cost of factoring but much higher than the buyer's opportunity cost.2) As soon as an invoice is approved in the Buyer's ERP system, such an invoice is automatically offered to the supplier for early payment. The supplier will see the offers in the TS supplier portal.3) In the portal, the supplier can select the desired payment date and agrees to the interest the Buyer charges for advancing the payment in form of a discount.4) The solution ensures that the new payment amount and payment date, as just agreed online, are updated in the Buyer's ERP system, ensuring correct payment.The result is that the bank is cut out from supplier financing and the margin is split between Buyer and Supplier to the advantage of both.--------------------------------------------Taulia had to solve three major difficulties to make it that easy: - A way to make early payments effortless for the Buyer through full automation- Enabling the supplier to accelerate all approved invoices in the channel offering the most value- Getting the accounting and payment complexities right
  • Dynamic discounting creates value for both buyers and suppliers. Buyers can invest their available cash in their own invoices at risk free double digit returns. Suppliers receive an instant payment, providing them with affordable working capital financing.On the top right, you see how dynamic discounting adds value to multiple departments within the buying organization. For example, Treasury realizes a high return on available cash. Finance realizes the P&L benefit of cost savings from the discounted invoices. Procurement improves relationship with its supplier base and converts supplier from net terms to terms with discounts. Lastly, IT is happy because the Taulia solution can be implemented quickly with minimal strain on IT.On the bottom right, you see the value that is created for Suppliers from having the instant payment option. The immediate payment option provides suppliers with faster access to cash, improving the suppliers ability to accurately forecast their cash flow.

The Power of Complete AP Automation Webinar Presentation Transcript

  • 1. The Power ofComplete AP Automation Tradeshift & Taulia Webinar September 25th 2012
  • 2. Your presenters today Christian Hjorth Chief Commercial Officer, Tradeshift Been with Tradeshift since the early start and came from Salesforce.com and SAP Joe Hyland Sr. Director Marketing, Taulia Heads up go-to-market strategy; ran P2P marketing at Bottomline Technologies
  • 3. Today’s Agenda• The Challenge and the Opportunity• Tradeshift Business Cloud• Taulia Dynamic Discounting• Joint Value Proposition• Q&A
  • 4. The Challenge and the Opportunity
  • 5. Your Situation Today• Lots of paper invoices• Fragmentation of channels• Poor supplier adoption• Error prone process• Time consuming communication with suppliers• Losing $ by not capturing supplier discounts
  • 6. Imagine if…..• You did not have to deal with any paper invoices• Invoices arrived within minutes of them being sent by ALL your suppliers• Your suppliers had visibility into real time invoice status• You could enforce your procurement process through invoice validation• You could automate and maximize supplier discounts trimming millions off your AP spend
  • 7. Tradeshift’s Approach to E-Invoicing
  • 8. Tradeshift At Tradeshift we have the ambition to change the waybusiness is done by allowing organizations to exchange invoices for free. We connect businesses to all their suppliers andcustomers regardless of company size, not only saving cost but also ensuring they get paid faster at both ends of the supply chain.
  • 9. e-invoicing has failed to keep customers happy* Only 12% Said their current solution was very satisfactory. Efficiency and cost Are the biggest barriers to becoming a universal solution. 57% agree that adoption would be widespread if it was free to suppliers. 47% think its pointless E-invoicing is pointless without widespread supplier adoption and addressing. These barriers are going to be key in reaching that stage. *CFO research across 600 organizations Dec 2011
  • 10. We address the problem with 3 key approaches1. We make it FREE for suppliers to use2. We make it EASY and provide many different channels for suppliers3. We make it simple and efficient for you to ENGAGE and MONITOR progress
  • 11. Why e-Invoicing Needs to be Free• Very rarely is supply chain adoption over 10% due to high costs to suppliers• The “soft” part of the business Where do the process like phone calls and email costs go? is typically more than 20% of the total business cost• These networks typically get 90% of their revenue from their suppliers, this creates a massive barrier for adoption• How much cost do you want to push down the supply chain?
  • 12. How we approach the supply chain# of invoices Guided integration (per year) services and self- service configuration Plug & Play connectors to large accounting systems, self-service configuration and printer drivers State of the art invoice application or CloudScan™ service # of suppliers ExistingWeb Portals or Use of Solutions Tradeshift Integrated Approach Scanning Solutions
  • 13. The Network Engagement Tool• Manage your whole supply chain invoicing in one tool• Segmented messaging for different supplier groups• Trigger based campaigns based on supplier actions• Real-time invoice validation using the business firewall
  • 14. The Unique Business Model is an Ideal Platform for Launching Supplier Finance Programs Apps: B2B Applications for TradeshiftBusiness documents: communication: extending the InstantTransmission of quotes, POs, functionality of Payments - Status change, messaging, the platform. Supplier financee-invoices, credit notes etc. etc. Used by programs Tradeshift and partners
  • 15. Taulia’s Approach toDynamic Discounting
  • 16. Today’s Invoice-to-Pay Process:Banks Benefit – Not Buyers or Suppliers SUPPLIER LARGE BUYER Invoice-Net 60 Invoices Buyer Invoice Approved on Day 10 Buyer earns <1% Suppliers Factors annual interest until BANK at 20% APR due date
  • 17. Status Quo is Ineffective• Buyers Have Record Cash as % of Assets 2002 2006 2012 Amounts of Cash 6% 8% >10%• Typically Invested at 4-Week Interest Rates 2002 2006 2012 Near-Zero Return 1.7% 5% 0.1%• While Invoices are Days Until Approved Payment 2002 2006 2012 Ready to Be Paid! 20 days 30 Days 45 Days
  • 18. Dynamic Discounting Represents a Win-Win• Enables large companies (“Buyers”) to save money and improve return on cash by paying suppliers early• Enables smaller companies (“Suppliers”) to access less expensive financing alternatives by accepting time- variable “Dynamic Discounts”Imagine…paying your suppliers less and having them thank you
  • 19. How Does it Work?Solution whereby 1 Buyer sets interest ratessuppliers are and activates suppliersoffered early in ERPpayment based ona discount rate -set by the buyer 2 Approved invoices are offered automatically for Instant Payment 4 Payment schedule updated in SAP according to agreed terms 3 Supplier selects payment date and accepts discount
  • 20. Improving Traditional Discounts1 2 Make them dynamic Price to opportunity Sliding scale discount Supplier Buyer discount 3.0% “Hit-or-miss” discount credit rating potential Strong Low $ 2.0% $ 1.0% $ 0% Poor High 0 1 2 30 0 Days 0 Leverages a sliding scale discount  Segment suppliers and price Enable the Buyer to realize a discounts to their alternative discount throughout the entire funding cost payment period
  • 21. Benefit to Buyers and Suppliers Buyer objectives  Treasury – Increase returns on available cash with Enables corporate treasurers complete control of the program to generate risk-free double-  Procurement – Scale discounts across 100% of supply digit returns on available chain and motivate suppliers to complete e-invoicing on- Buyer liquidity by paying suppliers boarding early in exchange for a  Finance – P&L cost savings and accurate cash flow discount forecasting  IT – SAP certified solutions enable rapid deployment with limited drain on internal IT resources Supplier objectives Offers suppliers a less  Faster access to cash expensive alternative to  Cheaper than funding alternativesSupplier financing by accepting time-  Helps to meet quarterly targets/bonus targets variable discounts on instant payments  More convenient than funding alternatives  Provides the right incentives for buyer
  • 22. Joint Tradeshift/Taulia Value Proposition
  • 23. The perfect partnership• Higher e-invoicing adoption from all supplier segments due to lower barriers (more channels)• Faster invoice approval, which increases potential discount captured• Maximize discounts in all supplier segments• Offer suppliers to get paid instantly• Tools to promote discounting offers to both active/non active suppliers
  • 24. Business Case Impact from e-invoicing Impact form Dynamic Discounts Reduce processing cost in AP Discount spend and pay less• Eliminate retyping of invoices • Total spend EUR 1bn (65%) • Accelerated spend EUR 200m• No error handling of incorrect • Average discount 2% invoices (20%) • Days accelerated 30• Reduce supplier requests (15%)Example Example Annual cost saving: Annual cost saving: EUR 300.000 EUR 3.8m (23%) (total invoice volume 100.000) (assuming 1% offer cost on cash)
  • 25. Q&A
  • 26. Thank Youtradeshift.com/enterprise taulia.com