Real-Time Communication Between Your ERP System and Your Supplier Portal

Chris Cauley, Senior Director Solutions Consulting, Taulia

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Solution Demonstration

VII. Questions

Agenda

No visibility into the invoice process

Unnecessary invoice status

and inquiry calls

Missed early payment discount

opportunities

AP Depts. drowning in

paper

High cost of manually

processing invoices

Challenges in Your Payables Process

Why do supplier inquiry calls take up most of my time?

Am I missing out on supplier discount opportunities?

Is there a better way to optimize working capital?

Buyer Pain Points

Did you receive my invoice?

When will I get paid?

Can I get paid earlier?

Supplier Pain Points

Buyer and Supplier Pain Points

The Perfect Storm – Time for a Change

01020304

T E C H N O L O G Y

S U P P L I E R S

I N T E R N E T

C L O U D / S a a S

Efficient ERP backend systemsInvoice Workflow and AutomationReal-time analytics

Internet savvyDemand visibility and predictabilityOften cash poor with unfavorable financing landscape

Open connectivityAbundant informationBusiness without limitations

Secure and scalableDriver for more savings New collaboration paradigm

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Solution Demonstration

VII. Questions

Agenda

The Foundation for a Successful Supplier Financing Program

Moving from Traditional to Full Electronic Invoicing

What eInvoicing is Not:o Scanned/imaged paper invoiceso OCR’ed paper invoiceso Emailed PDFs

Sending and Receiving Invoices Electronically

Completely Eliminating Paper

Data Stays Data: No Data Entry or

Correction

eInvoicing

What is eInvoicing in 2014 and beyond?

Key Take Away

Suppliers are a

Stakeholder, not a Sales Target

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Solution Demonstration

VII. Questions

Agenda

Supplier Value Propositions

1. Complete Solution Offering2. Covers all Submission Types3. Interoperability with other platforms4. No Supplier Fees5. Financial Opportunity

Supplier Value Proposition 1: Complete Solution Offering

o eInvoicing, incl. flipping a POo Invoice statuso Remittance/payment detailso PO updates, confirmation & historyo Address changes, bank changeso Online Dispute resolutiono Online W9/1099

o Focus on eInvoicing– Connectivity often a one-way

street: “Incoming” only– No additional business data on

the portal or network

Current New

Supplier Value Proposition 2: Covers All Submission Types

Visibility provided for

ALL invoices and payments

regardless of the business process.

Paper, Fax

PDF

EDI, XML

ERS

eInvoice

Portal

Supplier Value Proposition 3: Interoperability

Current

Network

or Platform

Network or

Platform

Supplier accesses each platform used by its customers

New

APINetwork

or Platform

Network

or Platform

Single Access Point for Suppliers

Supplier Value Proposition 4: No Fees

• Simply put – suppliers will not use a platform that charges a fee• More and more providers offer electronic invoicing free of

charge to suppliers• Must offer genuine supplier business value from Day 1.

Supplier Value Proposition 4: No Fees

Large Volume Suppliers

Midsized Volume Suppliers

Low Volume Suppliers

Integrated eInvoicing (eFile, eLink)

• Traditional EDI, such as 810 or EDIFACT

• Various file formats (CSV, TXT, XML) and submission methods (FTP, AS2)

• Taulia’s API

Seamless and Convenient (eUpload, eSend)

• Upload of various formats into portal (CSV, XML)

• Emailing of invoices as attachments (PDF, image files) with subsequent supplier self-correction in error cases

Simple Submissions (eFlip, eForm)

• Flipping a PO (SAP MIRO in the cloud, supplier facing

• Invoice web form submission (when no PO available)

Removing the Barriers to eInvoicing Participation

Supplier Value Proposition 5: Financial Opportunity

Top Three Supplier Pain Points1. Did you receive my invoice?2. When will you pay me?3. Can you pay me earlier?

Supplier Value Proposition 5: Financial Opportunity

FACTORING MARKET IS GROWING AT 28.6%

ANNUALLY AND EXCEEDS $2.3 TRILLION

CREDIT CARDS CARRY 15% APR – INDUSTRY

AVERAGE

BANKS ARE RELUNCTANT TO LEND TO SMB’S AND

IF SO, IT’S OFTEN AT STEEP RATES

SMB LOANS ARE EFFECTIVE FOR LARGE

CAPITAL EXPENDITURES - NOT APPROPRIATE FOR DAY-TO-DAY EXPENSES

TRIL

LON

S

FACTORING

20062008

20102012

1

1.5

2

2.5

3

1.541.77 1.81 1.75

2.25

2.752.91

CompleteSolutionOffering

1 2 3 4 5Covers 100% of

Submission TypesInteroperability No Supplier Fees Financial Value

The Series of Events: A Simple Chain

Supplier Adoption

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Solution Demonstration

VII. Questions

Agenda

Fundamental InefficiencyBuyers Have Excess Cash

U.S. Non-Financial Companies’ Cash & Liquid Assets

Low Return on Cash U.S. Interest Rate – 10-Year Treasury Rate

($ in tn)

0%

2%

4%

6%

8%

10%

$0.0

$0.5

$1.0

$1.5

$2.0

Average Time Suppliers Are Waiting for Payments

33%1 to 30 DAYS

6%0 DAYS

50%31 to 60 DAYS

11%61 + DAYS

*American Express Small Business Monitor. Polled 500 Canadian Business Owners. September 2012

SUPPLIER Invoices Customer

BUYER Approves Invoice

on Day 5

BANK

Invoice-Net 60

Buyer Earns 0.75% APR until

Due Date

Suppliers Factor at 20+%

APR

1.

2.

3.

Banks Benefit from Payment Inefficiency

Never Ending Friction Between Buyers and Suppliers

Payables as an Opportunity

0 DAYSinvoice

10-15 DAYSapproval

60 DAYS due date

OPPORTUNITY

AVERAGE PAYMENT TERMS (DAYS)

Anheuser-Busch

Hertz

Apple

Industry Average

120 DAYS

60 DAYS

45 DAYS

56 DAYS

Supply Chain Finance:Great for largest suppliers (30-50); provides limited scale; low P/L benefit

Dynamic Discounting:Beneficial for deploying excess cash to drive P/L benefits; Comes with DPO impact

Taulia Enhanced Discounting:Increase profitability by capturing discounts without using your own cash

Supplier Financing Landscape

Financing for All

30-50 LARGEST

SUPPLIERS

Few NUMBER OF SUPPLIERS Many

Typical Supplier SpendCurve

Buyer Hurdle Rate

TAULIA ENHANCED DISCOUNTING

Single Integrated Platform for Taulia Supplier Finance, eInvoicing and P2P Platform

DYNAMIC DISCOUNTINGSCF

Alternative Financing Interest Rate

(Not Addressed)

TAULIA PLATFORM

ERP

FINANCIAL INSTITUTION

Seamless Electronic Connectivity

SUPPLIERS

BUYERS

Use Your Cash or a Cash of a Third-Party. Always Capture Discounts.

DYNAMIC DISCOUNTS ON NET TERM INVOICES

(OPT-IN)

EXTENDED PAYMENT TERMS ON TRADITIONAL DISCOUNTS

(OPT-IN)

$ $

$

$

$

ACTIVATE DYNAMIC PAYMENT TERMS (CONTRACTUAL)

$

TAULIA ENHANCED DISCOUNTING WITH THIRD PARTY CASH

Four-Step Discount Terms Methodology

Offer Early Payments for suppliers on NET termsActively promote “CashFlow” for maximum adoption

STEP 1

Optimize discount opportunity and capture for suppliers on discount terms

“Extend” existing discount terms

STEP 2

Implement Dynamic Payment Terms (DPT) as standard payment terms for Procurement

STEP 3

Actively convert suppliers to DPT

STEP 4

Dynamic Discounting Is a Win-Win

A sliding scale allows for higher discount the earlier the payment for ALL invoices

• Easier and cheaper access to capital• Alternative to more expensive sources of financing such as Factoring• Early payments offered through the same portal as eInvoicing

• Capture more Early Payment discounts• Strengthen supplier relationships• Risk-free short-term investments with double digit returns• Typical $1M to $2M returns per $1B in-scope spend

Definition

Supplier Benefits

Buyer Benefits

Why Suppliers Choose Early Payment Discounting

Allow suppliers to get paid sooner

Payment dates are well under industry averages

Discount rates can be less expensive than alternative forms of financing

More convenient than funding alternatives

Better balance sheet Helps to meet quarterly targets

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Questions

Agenda

Will Buyers Generate Acceptable ROI?

“Taulia has saved us more money quicker than anticipated.”

- Ben Shaffer, PG&E Finance Dept.

Source: PG&E

2008 2009 2010 2011 201205

1015202530354045

Taulia Deployed in 2011

$46M

$31.4M

$10M$5.8M$3.9M

$77.4M in Discounts

Will suppliers actually enroll?

Results:• Go-live 3.5 months after contract signature: • 45% of previous networked suppliers converted within 1 week• 99% converted within 5 weeks• Now enrolling non-previous networked suppliers: 30% of invited enrolled within 1 ½ weeks• $5M in discounts/Billion in spend• 7 Employees in AP department

Is the integration smooth?

“Before we thought a seamless integration was nice to have. But what we have learned is that it's more than nice, it just makes a tremendous, tremendous difference. You're using a standard solution - you have the look and feel of your ERP. You can't even tell when you're using your ERP or Taulia. It's just a pure, endless, seamless solution.”

- Marcia Golden, AP Director

90% of suppliers on-boarded

1.5 AP staff eliminated through attrition

Will suppliers actively use the portal?

9/10/1

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1/3/1

4

1/8/1

40

500

1000

1500

2000

2500

3000

Vendors InvitedVendors EnrolledInvoices Submitted

Gary Silsbe to discuss in next session.

Seamless ERP Integration

Minimal IT Support Required

No Supplier Fees24/7 Visibility

Flexibility to Ensure Millions

Saved

In Summary, what do I look for?

I. Current State of the Invoicing & Payables Process

II. Moving from Traditional Invoicing to Full Electronic Invoicing

III. Getting Suppliers On Board: 5 Supplier Value Propositions

IV. Supplier Discounts & Turning Issue Into Opportunity

V. Real World Success Stories

VI. Demonstration

VII. Questions

Agenda

Our Vision of Tomorrow For You

01020304

F R E E

P R O F I T S

A D O P T I O N

P A R T N E R

Free eInvoicing and Self-Services for your Suppliers

Increased Profits From Early Payment Discounting

Supplier Onboarding Guarantee

Greatly Improved Suppliers Relationships

Questions?

Get in touch with us!

Chris Cauley

Senior Director Solution Consulting, Taulia

Office: 415-376-8280 x7085

E-mail: chris.cauley@taulia.com

Twitter: @cauley3