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<p>© 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 2015 AP and Working Capital Report Capturing Game-Changing Savings with Working Capital Tools Q2 2015 | Featuring insights on... » Current Market Trends in Working Capital Software Usage » Dynamic Discounting Management » Supply Chain Financing » Electronic Payments Optimization » The Perfect Payment Index » Leading Working Capital Solution Providers Underwritten in part by Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 2 Introduction 3 Working Capital in AP 4 Working Capital in DDM 7 Working Capital in SCF 8 Working Capital in Electronic Payments 10 Optimizing the Supply Chain With the Perfect Payment Index 13 The Road Map to an Optimized Supply Chain 14 Conclusion 15 C2FO 16 Taulia 19 Transcepta 23 About PayStream Advisors 26 Contents Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 3 Introduction Capturing early payment discounts is a top goal for any Accounts Payable (AP) department, as it ultimately grants organizations huge returns on cash. However, if the department is still using manual AP processes, the resulting slow approval times and invoice processing errors keep this goal from becoming an achievable aspiration. The inability to capture what is effectively free money is a very frustrating dilemma for organizations, causing many to simply give up on the idea. Organizations that rely upon antiquated AP processes hurt more than themselves—they also deeply impact their suppliers. If a company is unable to approve and pay invoices quickly, suppliers experience slower cash flow, which further disrupts the supply chain. Suppliers may also be reluctant to continue business relationships with buyers who cannot pay on time, and as a result, those organizations could potentially lose important segments of their valuable supplier base. Fortunately, today’s organizations can use working capital software to increase discount capture while also alleviating AP pains around invoice approval and payment. Dynamic discounting, supply chain financing, and other working capital applications free up cash flow and strengthen the supply chain, ultimately improving supplier relationships and increasing a company’s bottom line. PayStream Advisors’ 2015 AP and Working Capital report offers a guide for organizations actively exploring working capital solutions. This report explores market trends and illustrates the relevance and applicability of working capital solutions such as dynamic discounting platforms, supply chain financing, and electronic payment methods. Also included are several profiles of some of the current leading working capital software providers. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 4 Working Capital in AP PayStream Advisors surveyed over 200 individuals employed in a variety of industries, and compiled data to reflect current attitudes towards early payment discount capture and working capital solutions. One of the most important findings of this research shows that discount management software adoption among organizations has grown dramatically from 2014 to 2015. Early payment discounts, traditionally given under the standard discount terms of “2% 10, net 30,” are common offerings among suppliers trying to incentivize their buyers to pay invoices faster. These buyers should need little encouragement to participate in early payment programs, as capturing discounts is one of the simplest ways to increase savings for organizations. However, most organizations are only able to capture discounts some of the time, see Figure 1. There are many problems that lead to late invoice payments and missed discounts. Organizations report that the greatest reasons for these issues are lengthy approval cycles, manual routing of invoices, and missing information on invoices, see Figure 2. Figure 1 Half of Organizations Can Only Capture Discounts Sometimes “How often is your organization able to capture early payment discounts available?” 1% 15% 34% 50% Always Never I don’t know Sometimes Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 5 Implementing invoice receipt automation, such as scan and capture solutions and eInvoicing portals, greatly cuts down on approval times and increases the AP department’s ability to capture early payment discounts. These returns increase when receipt automation is leveraged with a robust invoice workflow automation system. However, innovative organizations recognize that to always capture all the possible savings, as well as improve the health and success of their supplier base, they need to take their automation goals a step further. Savings that result from invoice automation alone are miniscule when compared to the huge returns possible with dynamic discounting. Dynamic Discount Management (DDM) and other working capital strategies allow companies to invest their cash safely at rates that can significantly exceed returns from many other traditional investments. PayStream has found that it is possible to achieve annual returns as high as 36 percent on available cash. These high returns make the adoption of dynamic discounting, supply chain financing, and electronic payments more than just an interesting supplementary investment to tack on to AP automation—it becomes a strategic necessity for competitive advantage. Fortunately, research shows that organizations are recognizing the importance of working capital tools. DDM adoption has grown steadily from 2012 to 2014, but in the last year, it has increased by a much greater amount, see Figure 3. Missing information on invoices 57% Manual routing of invoices 62% 55% Large number of exceptions 46% Lengthy approval cycles 43% Lost invoices 38% Decentralized invoice receipt Figure 2 AP Problems Result in Missed Discounts “What are the top three problems that lead to late payments and missed discounts at your organization?” Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 6 Thus far in 2015, 30 percent of organizations are using DDM. PayStream Advisors attributes this 22 percent increase in usage to a number of factors, including the enhanced ease-of-use and accessibility of these solutions, the affordable nature of cloud-based technology, and improved capabilities for suppliers. The organizations that have yet to adopt working capital solutions are most likely hampered by a lack of education within the market. The following section offers a guide to the uses, applicability, and benefits of DDM software. 3% 2012 2013 5% 8% 2014 30% 2015 Figure 3 Percentage of Organizations Using DDM Each Year “Are you currently using a Dynamic Discounting Solution?” Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 7 Working Capital in DDM Dynamic Discounting Management is software that leverages the speed and efficiency of AP automation to unlock cash flow for both buyers and suppliers. Instead of using static discount terms, such as “2% 10, net 30”, DDM solutions offer invoice discounts based on variable rates. These early payment discounts decrease as payment deadlines approach, enabling buyers and suppliers to set and select discounts according to their own business and financial requirements. There are a few different Dynamic Discounting terms models. Sliding- scale discounting is a commonly-used method that offers automatic discounts on a pre-defined set of invoices, starting high but decreasing as the invoice due date approaches. While discount schemes of this nature are effective, they rely on buyer-set APRs that are fixed for the duration of the terms window. Other Dynamic Discounting strategies offer a more collaborative approach that takes into account suppliers’ financial needs, giving them a hand into how APRs and terms are set. Dynamic Discount Management solutions go beyond simple early- payment discounts—they are designed to reveal and capture every possible savings opportunity. They enhance the discount capture process by offering a transparent and accessible tool to view discount terms and upcoming due dates at any time within the terms window. DDM also gives comprehensive control to suppliers, providing them with interactive tools and platforms that enable them to designate which invoices are eligible for discounts and for what type of discount. Because Dynamic Discounting is only applicable to approved invoices awaiting payment, the speed at which invoices are received, routed, and approved by AP is vital for capturing savings. Electronically received invoices— such as those generated directly from a purchase order or those originated electronically via EDI, vendor portal, or eInvoicing network— optimize this process, as does invoice workflow automation. DDM and other working capital applications are built into or can be leveraged with most electronic invoice management solutions on the market today. Despite the benefits of DDM software, some buying organizations still hesitate to use these solutions because they fear they won’t have the cash flow to consistently offer discounts to their suppliers. Fortunately, today’s DDM and working capital solution providers offer many funding possibilities, ensuring that a company’s budget does not affect their ability to capture savings. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 8 Working Capital in SCF Funding for dynamic discounts traditionally comes from a buyer’s capital, but supply chain financing (SCF) opens payments to competitive bids and invites banks and third-party funders to participate. Third- party participation, such as from hedge funds, is growing as word spreads of its available returns and relatively low risk. Early payments can be lucrative for large suppliers who have cash flow needs. The discount rates associated with early payments are generally lower than the finance rates of short-term loans. Cash-strapped buyers who have other priorities—such as a monthly revolve—or those who are unable to budget their DPO, generally split the returns from a DDM solution, while third parties get a very short-term (under 56 days) return well over 100 basis points. Supply chain financing may come from the working capital applications in invoice automation software, and can often be funded by the buyer, a third party, or both. SCF can also be used through supplementary working capital platforms that may be leveraged with existing systems. Currently, most organizations report that only 1 to 10 percent of their suppliers offer an early payment discount, see Figure 4. PayStream attributes this low rate to suppliers’ experience of often receiving late payments from their buyers. However, because of the ability to leverage SCF and gain quick returns, more buying organizations are urging their suppliers to adopt DDM technology. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 9 Because of SCF solutions, suppliers once again find it profitable to offer early payment discounts. As these solutions and financing options become more advanced and accessible, supplier participation is expected to increase. Working capital tools accelerate the exchange of information between trading partners, provide improved visibility into the status of invoices, and bring more control over financial transactions—all of which promotes higher supplier participation. These tools can be accessed easily through free self-service eInvoicing portals or with add-on solutions that integrate seamlessly with existing invoice automation systems. In addition, supplementary working capital marketplaces are appealing to suppliers for their collaborative design and multi-party control. Figure 4 Most Organizations Report Only 1-10 Percent of Their Suppliers Offer an Early Payment Discount “What percentage of your suppliers offer you an early payment discount?” 12% 10% 47% 20% 8% 4% 11-25% None I don't know 26-50% 50-75% 1-10% Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 10 Working Capital in Electronic Payments The final tools for a robust working capital strategy and an optimized supply chain are electronic payments and an electronic payments program. Payment management is very important to the success of many areas of an organization, especially the ability to capture discounts. Surveyed organizations reported that missed discounts are among the greatest pains they experience in their payment management process, see Figure 5. Figure 5 Missed Discounts Pose Big Problems in Payment Management “What are the top three greatest challenges your organization faces in the payment management process?” Late payments 30% High processing costs 35% Missed discounts 25% Duplicate payments 20% Employee confusion about the correct payment method to use 12% Lack of payment visibility 13% More than one payment method for some suppliers 12% Loss from fraud 4% Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 11 Efficient payment management and discount capture are closely related, and innovative organizations recognize the importance of strengthening this relationship through electronic payment solutions. ePayment solutions are critical to dynamic discounting for many reasons, including an accelerated payment cycle and the elimination of costs associated with printing and mailing checks. When an organization mails a check to pay an invoice, several days are lost in mail delivery, thus delaying the payment and minimizing the early payment discount opportunity. With a card payment, on the other hand, the invoice is paid and the discount is captured on the same day. Electronic payments give organizations back the days that check payments take away, increasing savings as they reduce payment cycle times. Electronic payments come in a variety of different forms, including commercial cards (P-cards, One Cards, Fleet Cards, and Ghost Cards), Virtual Accounts (VA), Automated Clearing House (ACH), and wire transfers. Purchasing cards (P-cards) are one of the most common— and easiest to implement—forms of electronic payments, and they are especially useful for organizations looking for savings opportunities. When asked about their methods for achieving rebates, most organizations reported that they use purchasing cards, see Figure 6. Although P-cards are more widely used, Virtual Accounts are also among the most effective payment methods for enhancing working capital programs. Virtual Accounts, or Virtual Card Accounts (sometimes called Single-Use Accounts) are payment card numbers issued by a bank under a card network and are used to settle invoices after approval. In 2014, Virtual Account payments became the fastest- Figure 6 Purchasing Cards Are the Most Widely Used Method for Capturing Discounts “Which of the following methods does your company use to achieve discounts?” 55% Purchasing Cards Dynamic Discounting 30% 26% Supply Chain Financing Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 12 growing segment of the ePayments landscape. With Virtual Cards suppliers may initiate the payment either via virtual terminal or as a direct deposit into a bank account, along with an electronic notification of the deposit. Virtual Account payments allow buyers to time payments and take advantage of early payment discounts. They also provide cost savings, revenue generation, and security features not available with typical P-card payments. With a Virtual Card Account, a buyer can potentially “triple-dip”: they can gain early payment discounts, earn card volume rebates, and take advantage of the grace period between purchase and monthly statement dates. ePayment solutions also have benefits in other AP and supplier-related functions, such as vendor self-service options, collaborative dispute resolution, quick delivery of remittance information, and assistance with compliance and auditing. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 13 Optimizing the Supply Chain With the Perfect Payment Index An electronic payment is a vital finance tool for increasing working capital and capturing discounts. However, the road to success in these areas requires that organizations formulate a plan to optimize their payment terms and maximize results. Building a strategy with a variety of payment methods also enables organizations to satisfy the diverse needs of their suppliers. Organizations that optimize their payments process can be defined as “Perfect Payers.” To help other organizations become Perfect Payers, PayStream has built a tool called the Perfect Payment Index (PPI). This tool illuminates weak spots in existing processes so that organizations can restructure their payment management strategies. The ultimate goal is to give buyers the ability to make a perfect payment—one that is made on time, uses the cheapest payment method possible, and achieves the highest possible discount. Perfect Payment Index (PPI)™ % on time • % paid electronically • % of discount potential captured 95% • 95% • 95% = 85.7% The PPI strives to balance the payment efficiency and working capital needs of buyers and suppliers The Perfect Payment Index™ Company Payment Discounts / Incentives 1 2 3 4 Average % Paid on Time (< 60 Days) 92% 92% 93% 91% 92% % Paid Electronically (ACH or Card) 55% 52% 39% 68% 53% % of Potential Discounts Captured 32% 76% 26% 74% 45% Perfect Payment Index 16.2% 36.4% 9.4% 45.8% 27.0% Tables 1 & 2 The Perfect Payment Index Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 14 The Road Map to an Optimized Supply Chain Dynamic Discounting, Supply Chain Financing, and ePayments are the three greatest strategies to create more savings and a healthier supply chain among organizations. The road map to using these tools successfully is as follows: 1. Automate AP: This is the foundation of true P2P success and process efficiency. Organizations should start by exploring invoice receipt and capture solutions (mailroom services, eInvoicing, OCR- data capture, validation, coding, etc.) and then compliment these with a strong workflow automation suite (routing, 2- and 3-way matching, non-PO support, escalation, reminders, etc.). The ability to capture discounts begins with the ability to process invoices electronically, transparently, and quickly. 2. Unlock Available Discounts: When organizations implement a DDM solution, it opens up the possibilities for savings. This software brings transparency and ease-of-use to the AP process, and when suppliers see how this tool ensures consistent early payments, they will offer more discounts. 3. Increase Cash Flow with SCF: Even with a DDM solution, buyers do not always have the funds to properly support early payments on every invoice. SCF broadens the potential of DDM by optimizing cash flow, encouraging supplier participation, and reducing risk in supply chain operations. 4. Implement ePayments Functionality: Electronic payments, especially Virtual Accounts, allow organizations to pay their invoices faster and with less risk. Suppliers will be more enthusiastic about business relationships and offering discounts when assured a swift payment. In addition, electronic payments allow organizations to look deeply into their payment management processes and optimize future operations. 5. Use the Perfect Payment Index: Using the Perfect Payment Index is the most important step in developing a payment strategy that produces perfect payments every time. It not only brings transparency to a payment management program’s strengths and weaknesses, it also allows organizations to create tiered payment timelines for their suppliers that incentivize cooperation and increase cash flow. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 15 Conclusion PayStream has found that with Dynamic Discounting and working capital solutions, the returns on purchases can total as much as 1 to 5 million dollars on every 1 billion in spend. In addition, the software is beneficial to suppliers and supply chain health. Any company that hopes to strengthen their supplier base and increase their bottom line should carefully evaluate potential solutions. To aid those organizations in their search, the following profiles showcase the diverse working capital and AP offerings of some of the market’s leading working capital solution providers. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 16 C2FO C2FO is an early payment solution that allows suppliers to name their own rate for accelerated payment in a live, bid/ask environment. The C2FO marketplace is driven by a supplier pull model in which suppliers control their rates and options. Buyers achieve their desired objectives (e.g., discounts and APRs), while their suppliers offer rates that align with the specific cash needs they have throughout the year. In a real-time working capital marketplace, both parties benefit: suppliers base offers for accelerated payment against their alternative cost of borrowing, allowing buyers to realize returns higher than those achieved in short-term investment markets. Marketplaces take into account the supply and demand dynamics of both parties, resulting in an optimal return for each. Corporations are able to generate a good yield on their cash (such as a 5-7% APR), and they de-risk their supply chain. In addition, suppliers can access the liquidity they need at a rate on par with or below where they could borrow. C2FO boasts an average delivery of 22 days of early payment to suppliers. C2FO is Collaborative Cash Flow Optimization. Since its first transaction in May 2010, C2FO has consistently enabled collaborative wins between buyers and suppliers, delivering billions in working capital and millions of days of accelerated payment across the globe. The platform has a wide variety of buyer verticals, and C2FO suppliers represent virtually every industry and size demographic. Founded 2008 Headquarters Fairway, Kansas Other Locations Seattle, London, Amsterdam Number of Employees 100-150 Number of Customers 30,000+ Target Verticals Retail, Transportation, Automotive, Aerospace, Technology, Manufacturing, Healthcare Partners/Resellers Fifth Third Bank, KPMG UK Awards/Recognitions Ingram’s Magazine’s Best Companies To Work For (2014); Global Finance’s 2014 and 2015 List of Innovators; 2015 OnFinance Top 100 Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 17 Solution Functionality C2FO is a cloud-based SaaS solution. It is a web-based platform that can be accessed from any web-browser and from any mobile device. The platform is ERP-agnostic and seamlessly integrates with buyers’ existing process frameworks and AP systems. C2FO is a global platform, available in any jurisdiction. C2FO allows suppliers to make an offer in APR or discount across any currency, and the company works with clients to adhere to appropriate local requirements. Additionally, the C2FO marketplace allows for a cross- over effect where a single supplier can access early payment on invoices from multiple buyers within a single platform. C2FO administers and operates its dynamic discounting program in a straightforward, private, and secure manner; there are no outside parties involved and no changes to the payment process between buyers and suppliers. C2FO securely handles multiple sources of data with a series of robust and easy-to-plug software modules. C2FO has a robust supplier onboarding team that is dedicated to supplier participation and client results. 30 percent of the company’s employees are full-time Supplier Relationship Managers (SRM). This team provides suppliers with 24/7 global, multi-lingual coverage via phone, web chat, email, and webinars. eInvoicing Integration C2FO works seamlessly with any electronic invoicing solution. Working Capital Services C2FO enables companies to name their own rate for working capital. The C2FO platform allows both buyers and suppliers to manage and achieve their unique goals. For buyers, these include (but are not limited to) setting a target APR and a minimum APR threshold, automatic withholding of reserve percentages, the ability to customize APR settings for individual suppliers, and the ability to easily adjust the amount of cash available for early payment and when that “cash pool” is replenished. C2FO also includes advanced buyer settings to flexibly manage working capital metrics. From suppliers, C2FO allows each company to select their desired APR or discount rate for early payment, choose which invoices they wish to receive early payment on, and adjust how often they Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 18 request early payment without any ongoing contracts or risk-based underwriting. Suppliers are onboarded with a single click, requiring no documentation or signatures to participate. Once a supplier’s early payment offer is accepted, the invoice date and amount are automatically updated in the buyer’s AP system. The buyer’s existing AP and invoicing processes are then used to pay the invoice early. Reporting and Analytics Every C2FO market participant can download files on demand that show invoice-level detail on all their market activity. C2FO also provides an in-application dashboard that allows users to view real-time key metrics within any given date range. For buyers, these metrics include early payment awarded, awarded income, additional income opportunities, DPE (Days Paid Early), and APR. For suppliers, metrics include awarded early payment, discount total, DPE, and new pay date. Additionally, the platform offers buyers more detailed reporting that includes participation by segment, total loaded AP, crossover analysis, and more. All reporting capabilities allow organizations to gain deeper AP and supply-chain insights and discover opportunities for optimizing their working capital. Implementation and Pricing C2FO assigns a dedicated Implementation Project Manager (IPM) to align the program with the client’s business processes and goals. Formal training materials and documentation are delivered to each client through various methods, including one-on-one, on- site classroom, virtual, and web-based training programs. C2FO implementation generally takes 6-10 weeks. Buyers are also assigned a dedicated Account Manager to manage program performance. The user interface offers several support options for suppliers, including a self-help video, a downloadable Quick Reference Guide, and a Live Chat feature for users’ questions. Suppliers can also reach the C2FO support team via a toll-free support number or suppliersupport@c2fo.com. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 19 Taulia Taulia is a leading provider of Purchase-to-Pay and Supply Chain Financing Financing solutions. Taulia’s suite of products includes comprehensive eInvoicing, a supplier self-service portal, supplier information management, and Taulia Supplier Finance, including Dynamic Discounting and Supply Chain Finance Plus. Taulia also offers a shared supplier network to which over 250,000 suppliers have access. Taulia is committed to helping their customers achieve their business goals and works hand-in-hand with them to determine the best strategies and approaches to ensure this happens. Founded June 2009 Headquarters US HQ in San Francisco, CA EU HQ in London, England Other Locations Park City, UT; Austin, TX; Dusseldorf, Germany; Sofia, Bulgaria Number of Employees 200 Number of Customers 75 Number of End Users >250,000 Target Verticals Vertical Agnostic Partners/Resellers Oracle, SAP, ReadSoft, Coupa Awards/Recognitions Bully Award; 2015 Best and Brightest Places to Work in the Bay Area; 2014 OnDemand 50 Companies to Watch Solution Functionality Taulia provides a hosted SaaS solution that integrates with all major ERPs. Its platform is offered in more than 99 countries worldwide with support for multiple languages and currencies. Taulia’s solution is free for suppliers—thus maximizing supplier adoption and participation—and it targets the entire supply base, regardless of size, location, or creditworthiness. Taulia’s supplier self-services are built on a web-based platform and address all forms of supplier communication, information, and transaction processing. By logging onto the portal, suppliers can view information on purchase orders, invoice statuses, and approvals, and more at any time. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 20 Other benefits include suppliers’ ability to electronically message their customers, update their vendor master information, and access free electronic invoicing services. In addition, Taulia’s Supplier Information Management (SIM) offering simplifies data collection and makes suppliers more self-sufficient in managing their own information. With SIM, suppliers enter, upload, and edit their own information, creating a central repository of supplier data for buyers. Beyond automating and streamlining the payables process, Taulia offers a supplier financing suite that allows companies to transform every invoice into a revenue opportunity. Whether early payments are funded by the buyer, bank, or third-party financier, Taulia believes that all invoices should be available for early payment to suppliers. eInvoicing Integration Taulia’s invoicing suite, Inbox by Taulia™, offers a wide selection of invoice submission formats to ensure maximum participation and program success. All common methods are accepted, including integrated eInvoicing, uploads, flipping POs, web forms, or processing email attachments via OCR (with subsequent supplier verification). Taulia supports all formats and protocols, including EDI, Edifact, XML formats, and text files. Working Capital Services Taulia has developed its extensive P2P platform on the belief that all suppliers should be able to accelerate payments at all times, regardless of their demographics or the funding source. The solution offers both a buyer-funded Dynamic Discounting product and a third-party funded Supply Chain Finance Plus product, and allows clients to implement a mix of both buyer-funded and third-party funded early payments. Buying organizations can decide which types of Dynamic Discounts are offered to suppliers, choosing from Early Payments, Enhanced Discount Terms, and Dynamic Payment Terms (DPT, a.k.a. ASAP terms). Taulia can offer discounts on all invoices, regardless of submission method. This allows its supplier financing products to address the entire spend of an organization, rather than just the parts submitted through an eInvoicing network. With supplier-initiated discounts, suppliers can opt to accelerate an Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 21 invoice in exchange for a calculated discount based on the number of days they are paid early. Early Payments are only offered on NET-term invoices, and they never change the payment terms of a supplier. Suppliers can also opt to accelerate all invoices, thus enabling “CashFlow.” Enhanced Discount Terms offer faster payment for an additional discount on certain previously-discounted invoices. Dynamic Payment Terms are sliding-scale discounts that allow Procurement to negotiate terms with suppliers up front. Based on these terms, the buyer pays the discounted invoice as soon as it is approved. Taulia supports both recurring and one-off discounts. The solution allows the customer to define Early Payment groups and assign suppliers with resources and support from the Taulia Value Enablement Team. An Early Payment group is generally defined by an underlying APR and liquidity thresholds. Customers can group all suppliers into one group or segment them into many different categories, such as geography, spend, supplier size, and credit rating. Buyers can set hurdle rates to turn the program off at certain times, such as the end of the quarter or fiscal year. Taulia leverages the payment capabilities of clients’ native ERP systems while supporting the onboarding and collection of supplier bank accounts in a secure and compliant way. Additionally, the Taulia self- service component provides detailed remittance details to all suppliers in their preferred delivery format, regardless of how the payment happens. A relationship with Taulia is a true partnership. Taulia is committed to helping their customers achieve their business goals, working hand- in-hand with them to determine the best strategies to ensure this happens. Reporting and Analytics Taulia provides reporting and dashboard tools for Treasury, Finance, Procurement, and AP to measure and monitor the success of their discounting initiatives. These tools can be tailored to each department’s needs. These tools include reports that analyze program success, reserve liquidity monitoring, and cash flow management. Taulia’s reporting platform, Taulia Analytics, aggregates and analyzes millions of supplier transactions from more than 250,000 suppliers. The analytics platform provides customers with a look at business Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 22 trends while helping companies set goals, compare themselves to industry averages, and streamline their supply chains. Customers can compare their payment terms, DPO, and early payment discount rates against benchmarks in their industry, region, country, and across the globe. The platform provides immediate usable data to customers, without having to go through data mapping and cleansing. Implementation and Pricing Taulia’s implementation takes 3 months, on average. Factors that define the length of implementation include the complexity of IT structures within an organization, the type of workflow solution in place, internal change management procedures, and the number of suppliers a buying organization is looking to onboard. Taulia trains all customers and suppliers to ensure proper usage and adoption rates. Taulia also offers extensive support from the company website, email, chat, and telephone. The solution is equipped with self- help material in the form of video, interactive tutorials, documentation, online help, FAQs, and a knowledge base. The Taulia solution is available in two pricing formats. Customers can choose an annual subscription fee or revenue share model based on discounts captured. An additional one-time setup fee is charged for buyers. Suppliers enjoy completely free services and will never be charged transaction fees. Taulia also guarantees $1 million saved within the first year, or their next year of service is free. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 23 Transcepta Transcepta is a global business network that provides AP and Procurement professionals with collaborative P2P, cloud-based solutions. Transcepta’s network solutions include eInvoicing, invoice validation, PO management, spend management, VAT compliance, and supplier information management. Since 2005, Transcepta has connected over 100,000 businesses worldwide and processed millions of transactions for its clients. Transcepta’s core product is its supplier network, and supplier connectivity and enablement is the foundation of its entire P2P suite. The company’s strengths lie in its ability to connect all of a clients’ suppliers, regardless of size or sophistication, and in the solution’s ability to work with any ERP. The Transcepta service is configurable and proficient, bringing its clients 100 percent straight-through processing through robust validation, significantly reduced payment cycle times, and increased employee productivity. Transcepta has recently strengthened its position in the P2P market by expanding its supplier network services with a range of working capital programs, including Supply Chain Financing and Dynamic Discounting. Founded 2005 Headquarters Aliso Viejo, CA Number of Employees <100 Number of End Users 200k+ Partners/Resellers Oracle, SciQuest, TrustWeaver, Microsoft Awards/Recognitions Validated for Oracle Integration Solution Functionality Transcepta’s P2P, supplier network, and working capital solutions are cloud-based, global, and highly adaptive. Transcepta’s service connects to virtually every enterprise and mid-market ERP, including E-Business Suite, PeopleSoft, JD Edwards, and Fusion/ERP Cloud. Transcepta’s network is “Oracle native,” with Oracle Validated Integration, and it supports connection to Oracle iSupplier Portal, eSettlements, and Fusion Supplier Portal. Transcepta also integrates all of the leading AP automation and workflow applications, including Oracle WebCenter Imaging, Kofax MarkView, Perceptive Brainware, Basware, and SciQuest AP Director. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 24 The Transcepta service is hosted in Tier 4 data centers, with full redundancy and failover capability. All servers are dedicated to and managed by Transcepta—there are no Transcepta components on “public cloud” servers like Amazon Web Services. Application security is built into the system and has passed multiple audits and assessments by Transcepta customers. Security is modeled on ISO 27001. Transcepta supports virtually any output file type, including XML, EDI 810, CSV and other text file formats. It also supports PDF and TIFF for invoice images. Transports include all forms of FTP (including FTP-S and sFTP), web services, a Transcepta document transfer agent called the Transcepta Document Transmitter, and an Oracle transport (for which Transcepta is the only native supplier network). Transcepta’s solution processes and supports multi-currency and multi-lingual business transactions. It supports discounts in the currency of the original invoice, and invoice transactions are required to match the currency of the purchase order, which Transcepta validates. Furthermore, transactions are VAT compliant through Trustweaver. eInvoicing Integration eInvoicing is a central part of the Transcepta solution. Transcepta supports EDI, XML, and CSV formats, and can process PDF formats through email without using OCR or other manual processes. It also offers a Virtual Printer that processes data from any system with the ability to print, as well as a robust supplier portal. Working Capital Services By enabling trading partners to collaborate over the network, Transcepta helps clients manage discount offers that benefit both the supplier and buyer. The Transcepta system allows a client to configure overall settings, like amount of discount available across suppliers, and then set specific parameters by “supplier class” – a designation that Transcepta uses to define special handling rules among groups of suppliers. These settings include the ability to set parameters around when discounts are offered, as well as specific settings on the actual discounts. The system supports both recurring and one-off discounts, and both buyer-funded and third party-financing models. Transcepta will include gain-share setup in its next release. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 25 Transcepta focuses on dynamic and flexible document output and delivery, as well as on supplier customization. The solution delivers virtually any payment instruction file format, including XML, CSV, text, and other formats. Transcepta standard interfaces facilitate AP and GL postings, and send remittance information through email. In future a release, suppliers will be able to set their preferred delivery form of remittance data. Reporting and Analytics Reporting and analytics are accessed in the same way the client accesses other spend analytics through their ERP, as all transactions are passed into and out of the client’s ERP system. Additional reporting is also available in the form of 12 standard reports, and can be customized based on need and stage in the supplier recruiting cycle. Several reports also assess discount opportunities and “payables flow- through.” Additional reporting will be available in the upcoming product release. Implementation and Pricing Typical implementation times are 10 to 26 weeks from project kickoff to the completion of testing. The main determining factors are the client’s ability to define requirements firmly and the client-side interface configuration. Transcepta offers industry-leading support available via videos, email, training webinars, or phone. Transcepta also provides a dedicated professional services team that works with account management to update clients on reporting, new features and procedures, and additional supplier recruiting. Transcepta offers competitive pricing for mid-market and enterprise customers. There is no charge to suppliers to send invoices and receive POs through Transcepta. Q2 2015 © 2015 PayStream Advisors, Inc | www.paystreamadvisors.com | info@paystreamadvisors.com 26 About PayStream Advisors PayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) 523-7357 or visit us on the web at www.paystreamadvisors.com. </p>
