This document summarizes a webcast about improving working capital through various payment strategies. It discusses 5 proven strategies: 1) faster invoice approval through automation, 2) improving payment terms through supplier onboarding, 3) enabling more early payment discounts through dynamic discounting, 4) capturing rebates through buyer-initiated payments, and 5) expanding available cash through supply chain financing. Technology plays a key role in enabling these strategies through features like collaborative workflows, financial solutions, and connecting all parties. The webcast highlights how these strategies can save millions through increased working capital compared to traditional AP automation alone.

1. 5 Proven Strategies to Improve
Working Capital
July 9, 2014
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2. Agenda
 Introductions
 The BIG value in Payables
 5 Proven Strategies for Working Capital Savings
 Putting it all together
 Technology’s Role in Working Capital Optimization
 Q&A

3. Introductions
Rinus Strydom
 VP Alliances & Solutions Consulting, Tradeshift
 15 years using, deploying, and marketing enterprise
procure-to-pay solutions
Tom Glassanos
 President Bavelos Group
 Over 10 years Early Payment Program experience
 “Dynamic Discounting” inventor
 3 times Supply Chain Executive Magazine “Pro to Know”

4. Bavelos Group Profile
 Early Pay Programs
 Supply Chain Financing
 Best practice consulting
Advisory Services for
Working Capital Optimization

5. Firms the Bavelos Team Has Helped
Bavelos methods for working capital have benefited over 50
global corporations and more than $1 trillion in spend.

6. Big Value in Payables

7. The Big Value in Payables
Financing the supply chain to
strengthen trade and save millions
0 Days
Invoice
15 Days
Approve
60 Days
Due Date
The Opportunity
$9 Trillion Global Investment Opportunity*
*Main Street Advisors

8. The Early Payment Opportunity
* Actual Bavelos EPD experience
Over 80% of suppliers surveyed will consider discounts for
accelerated cash
0.2% 0.3% 0.15%
3%
Money
Market
AADebt
30 Days
U.S. Treasury
30 Days
Early Pay
Discounts
8-40%*
*Early pay discounts yield .5-3% over 10-60 days risk free
today’s treasury
Cash Return options
Early Pay
Discounts

9. What Can Be Achieved?
 Up to 1/2% of savings on all spend
 Over 30% APR on use of cash
 Increase in cash via longer DPO
 Efficiency - 99% paperless AP
2% 15 net 45 ASAP
Day 10 Day 30 Day 45
Early pay discounts
Rule of thumb:
$3-$5 million of savings for every billion of spend!*
*Data from over 50 major corporations; >250k vendors; >$1 trillion spend

10. How to Enable the Working Capital Opportunity
 Longer net terms – more need for cash
 Faster approval – more early payments
Day 10 Day 30 Day 45 Day 60
Faster invoice
approval
Longer
Net Terms

11. 5 Proven Strategies for
Working Capital Savings

12. 1. Faster Approval – Core Automation
 Electronic invoicing
 Workflow approval
 Pre-matching (PO Flip)
Shorten the approval time with core
AP automation tools

13. 2. Improve Terms – Supplier Onboarding
 Leverage on-boarding
 Extend net payment terms
 Propose early payment terms
 Document this in the enrollment
2% 15 net 45 ASAP
Day 10 Day 30 Day 45
“Transform Terms” when you onboard
suppliers for electronic invoicing
The Foundation of an Early Pay Program

14. Components of a “Terms Transformation”
Analytical assessment
– Which suppliers to target
– Number of days for approval
– Optimal discount terms to offer
Discount oriented terms policy
– Extended net terms
– Explicit hurdle rate
Compelling vendor proposition
– Choice of early pay options
– Electronic payment
2% 15 net 45 ASAP
Day 10 Day 30 Day 45
A process of analytics & telesales

15. Terms Transformation - Speed to Benefits
Typical campaigns are 90-120 days in length
(Can take place prior to automation or the same time)
Kickoff
Outreach
Begins
Initial
Results
>75%
Results
4 weeks 4 weeks 8 weeks

16. 3. Enable More Discounts - Dynamic Discounting
 How it works
– APR rate is fixed
– Discount varies
 Benefits
– Discounts on any
approval up to net date
– Picks up large savings
for earlier payment
Invoice approval time
Day 10
0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Day 30 Day 45 Day 60
2% 10 ASAP 45
Discounts >2%
All invoices qualify for a discount
Use of ASAP (sliding slope) Terms

17. Dynamic Discounting
 How it works
– Presents “ad hoc” early pay offers
– Two methods: POs or email
 Benefits
– Skims incremental savings at key times
– Offers based on supplier end of month
& quarter cash needs
– No pre-existing discount terms needed
Enables opportunity for discounts on every invoice
Pay Me Now Offer
• $3,200 approved to pay
• Pay today for 1% discount
• Click “here” to approve
Use of “ad hoc” early payment terms

18. 4. Capture Rebates - Payment Automation
 “Buyer Initiated Payment” (BIP)
 Works on mainstream ERP spend
 Suppliers pays interchange fee
(equivalent to early pay discount)
 Bank rebates % of fee to buyer
(share of the discount)
 Buyer gains 30 days of cash
Rebates as much as 1% on 25% of spend
1
Buyer ERP approves
payment & initiates
authorization
DIRECTLY to card
network.
2
Supplier
sends invoice
to buyer
3
Card network
authenticates
and transfers
funds
Supplier
bank
Buyer
bank
Use of Buyer Initiated Payment (BIP) Cards

19. 5. Expand Available Cash - Supply Chain Finance
 Bank financing for extended DPO
– Finances cash to supplier on “buyer approved” invoices
– Low cost credit – buyer approval limits risk (typically LIBOR+
rates)
– Most valuable for investment grade buyers
– Generates free cash for buyers by pushing out DPO
 Treated as a factoring transaction
– Bank establishes factoring relationship with supplier
– No credit impact on the buyer
 Targets the biggest suppliers who can impact DPO

20. Case Example: Proctor & Gamble
“P&G Stretches Payments to Suppliers”
To Free Up $2 Billion in Cash

21. 5 Proven Strategies for Working Capital
1. Faster approval – core AP automation
2. Transform terms – supplier on-boarding
3. Expand discounts – dynamic discounting
4. Capture rebates – buyer initiated payment cards
5. Expand available cash – supply chain financing

22. Optimizing All The Tools
Maximizing payables-related CASH and SAVINGS

24. What is Technology’s Role in Working Capital
Optimization?
 Faster approval of Invoices
 Enable dynamic discounting
and SCF in-business-process
 Access to early pay programs
for all suppliers

25. Tradeshift’s Open Platform Approach
TRADESHIFT PLATFORM
Document Transmission, Statuses, Messages, Integration, Security, API
Supplier
Buyer
Order
Management
Electronic
Invoicing
Business
Firewall
CloudScan®
(Paper)
Collaborative
Workflow
Financial
Solutions
Build Your Own
App
Supplier
Management
Ability to expand functionality as needed

26. Enabling Supplier Participation Through
Electronic Onboarding
# Size of suppliersLarge Medium Small (Long Tail)
Supplier
Integration
Supplier Integration Supplier Integration
Supplier Validated
CloudScan
Supplier Validated CloudScan
60-70%
(invoice
volume)
Tradeshift Web ApplicationPlug & Play
connectors like
Quickbooks
Plug & Play
connectors
Plug & Play connectors
CloudScan EnterpriseCloudScan
Enterprise
CloudScan
Enterprise
100%
(invoice
volume)
Supplier Validated
CloudScan
Supplier Validated CloudScan
CloudScan EnterpriseCloudScan Enterprise
CloudScan
Enterprise
Plug & Play
connectors like
Quickbooks
Plug & Play
connectors
Plug & Play connectors
Tradeshift Web Application
Tradeshift is 12x faster than the competition at onboarding suppliers
100%
(suppliers
)
# of
invoices
# Of
suppliers
12

28. In-Business-Process Simple Messaging

29. Tradeshift’s balanced value proposition
Supplier Buyer
Communicate & collaborate
directly with your buyers.
Lower costs for your entire supply chain.Manage and track POs,
invoices, pmnts, and more.
Connect via web, integration
or any accounting software.
Free. No supplier fees. Ever.
Communicate and
collaborate with suppliers.
Innovate past invoicing on
top of an open platform.
One platform for all your
business needs.
Reduce cost and friction for
your entire supply chain.

30. Summary: Early Pay Discount Benefits Dwarf
Those of AP Automation
Process Automation
• Eliminate paper invoices, reduce invoice
approval cycle time, and improve visibility
and overall AP processes
The Typical
Accounts Payable
Business Case
$450K
$1.5M
$3.6M
Early Payment Discounts
Discount program management and
dynamic discounting resulting in increased
discounts and >20% return on cash
Reduction in Invoice Exceptions
Shared supplier portal enabling suppliers to
view and resolve invoice exceptions and
reduce supplier inquiry calls
Process
Automation
Total
Business
Case
Benefits
Early
Payment
Discounts
Reduction
in Invoice
Exceptions
Automation
Based
Discounts
$1.5M
$150KAutomation Based Discounts
Reduction in invoice approval cycle time
and dynamic discounting capabilities
enables additional early payment discounts

31. Q&A

32. Thanks for joining us!
• Register for our next webcast:
tradeshift.com/suppliervalidation
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• Presentation and recording will be sent soon
July 9, 2014
5 Proven Strategies to Improve
Working Capital