The Power of Complete AP Automation Webinar
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Transcript of The Power of Complete AP Automation Webinar
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
Today’s Agenda
• The Challenge and the Opportunity
• Tradeshift Business Cloud
• Taulia Dynamic Discounting
• Joint Value Proposition
• Q&A
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
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
Tradeshift
At Tradeshift we have the ambition to change the way business is done by allowing organizations to
exchange invoices for free.
We connect businesses to all their suppliers and customers regardless of company size, not only
saving cost but also ensuring they get paid faster at both ends of the supply chain.
e-invoicing has failed to keep customers happy*
Only 12% Said their current solution was very satisfactory.
Efficiency and costAre 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
We address the problem with 3 key approaches
1. We make it FREE for suppliers to use
2. We make it EASY and provide many different channels for suppliers
3. We make it simple and efficient for you to ENGAGE and MONITOR progress
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 process like phone calls and email 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?
Where do the costs go?
Existing Solutions
How we approach the supply chain
# of invoices(per year)
# of suppliers
Guided integration services and self-
service configuration
Plug & Play connectors to large accounting systems,
self-service configuration and
printer driversState of the art invoice
application or CloudScan™ service
Use of Web Portals or Scanning SolutionsTradeshift Integrated Approach
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
B2B communication:
Status change, messaging, etc.
Apps: Applications for extending the functionality of the platform. Used by Tradeshift and partners
Tradeshift Instant
Payments - Supplier finance
programs
The Unique Business Model is an Ideal Platform for Launching Supplier
Finance Programs
Business documents:
Transmission of quotes, POs,
e-invoices, credit notes etc.
Today’s Invoice-to-Pay Process:Banks Benefit – Not Buyers or
SuppliersInvoice-Net 60
Suppliers Factorsat 20% APR
Buyer earns <1% annual interest until due date
SUPPLIERInvoices Buyer
LARGE BUYERInvoice Approved on Day 10
BANK
• Buyers Have Record Amounts of Cash
Status Quo is Ineffective
Cash as % of Assets
2002 2006 20126% 8% >10%
4-Week Interest Rates2002 2006 20121.7% 5% 0.1%
Days Until Approved Payment2002 2006 2012
20 days 30 Days 45 Days
• Typically Invested at Near-Zero Return
• While Invoices are Ready to Be Paid!
Dynamic Discounting Represents a Win-Win
Imagine…paying your suppliers less and having them thank you
• 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”
How Does it Work?
Buyer sets interest rates and activates
suppliers in ERP
Approved invoices are offered
automatically for Instant Payment
Supplier selects payment date and accepts
discount
Payment schedule updated in SAP
according to agreed terms
1
4
3
2
Solution whereby suppliers are offered early payment based on a discount rate - set by the buyer
3.0%
2.0%
1.0%
0%0 10 20 30
Days
$$
$
“Hit-or-miss” discount
Sliding scale discount
Leverages a sliding scale discount
Enable the Buyer to realize a discount throughout the entire payment period
Improving Traditional Discounts
Low
High
Strong
Poor
Supplier credit rating
Buyer discount potential
Segment suppliers and price discounts to their alternative funding cost
Make them dynamic Price to opportunity1 2
Benefit to Buyers and Suppliers
Buyer
Supplier
Enables corporate treasurers to generate
risk-free double-digit returns on available
liquidity by paying suppliers early in
exchange for a discount
Offers suppliers a less expensive alternative
to financing by accepting time-variable discounts on
instant payments
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 on-boarding
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 objectives
Faster access to cash
Cheaper than funding alternatives
Helps to meet quarterly targets/bonus targets
More convenient than funding alternatives
Provides the right incentives for buyer
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
Business CaseImpact from e-invoicing
Impact form Dynamic Discounts
Reduce processing cost in AP
• Eliminate retyping of invoices (65%)
• No error handling of incorrect invoices (20%)
• Reduce supplier requests (15%)
Discount spend and pay less
• Total spend EUR 1bn • Accelerated spend EUR 200m• Average discount 2%• Days accelerated 30
Annual cost saving:EUR 300.000(total invoice volume 100.000)
Annual cost saving:EUR 3.8m (23%)(assuming 1% offer cost on cash)
Example Example