Markus Ament (Maex), Chief Product Officer at Taulia, sat down virtually with the Spend Matters team to answer some questions we had for him about Taulia, dynamic discounting and the future of trade financing. Read between the lines as you see what Maex has to say – Taulia is doing exceptionally well right now in the field and the Taulia philosophy is one that is being mirrored by many AP, procurement and treasury heads we speak with. Missed Part 1? Not to worry; here is the link.
Spend Matters: How would you define Taulia's approach to discounting in a nutshell?
Maex: Taulia’s approach to discounting is actually quite simple - we want to help suppliers of all sizes to be paid as early as they require and in return, provide a discount for the faster payment.
We want to maximize the acceleration of payments. We know that the more advanced the supplier segmentation and discounting brackets (the right APRs for different groups of suppliers), and the more contextually relevant the liquidity threshold, the more payments will be accelerated and discount capture will be higher. On the supplier side, we make this process as easy as possible by providing opt-in early payments, an automatic acceptance feature called CashFlow™, Dynamic Payment Terms, ASAP terms, and the CashPlanner™ tool within the Taulia network.
Our primary focus is on creating a mutually beneficial situation for both buyers and suppliers that can occur regardless of a buyer’s cash position strength, future investments, or operating obligations. The most important component for us is that suppliers are provided with uninterrupted financing options. Not only does this strengthen the buying organization’s cash positions, it also injects capital into the supply chain and boosts the economy.
Spend Matters: Why are there different philosophies on depth of integration requirements for SAP and ERP in general when it comes to discounting? What is Taulia's position on this? How does this differ in the SAP and Oracle customer bases (typically)?
Maex: There is both a functional and a technological aspect to this answer, which differs based on which ERP system a company runs.
From our experience, SAP IT folks love an out-of-the-box integration that is tightly embedded as an SAP add-on directly within their system. By having our solution integrate seamlessly into SAP, it requires no additional work for busy IT professionals, while still adding robust and comprehensive functionalities to the system.
In the Oracle or anyERP space, the approach is different. The recommended (and accepted) integration approach is to provide a file-based exchange mechanism and a simple and easy API, which is what we designed our anyERP connector to do.
When it comes to functionality, SAP end-users in payables departments are constantly inside SAP, so introducing an additional application with new learning curves and change management requirements is not ideal or appreciated. With Taulia’s SAP add-on approach, we take the training and change management aspects out of the equation and allow them to use Taulia as if it were part of their original SAP system. For anyERP, the simple and easy API or file-based exchange is the perfect solution because it is what the Treasury, AP and Procurement teams are used to and frankly expect.
For the future, we have no plans to alter our integration methods, as they work flawlessly on each individual system. We will continue to provide a world-class P2P SaaS platform connected via a tight out-of-the-box add-on for SAP and an anyERP connector for Oracle, PeopleSoft, JDEdwards, Workday, Infor and all other ERP systems.
Spend Matters: Is e-invoicing the killer app for discounting or is discounting the killer app for e-invoicing -- or neither?
Maex: Brilliant question, and I would say a combination of both. Electronic invoicing lays the foundation for Dynamic Discounting, but Dynamic Discounting needs to be implemented and used for either to reach their full potential and deliver maximum benefits. While Dynamic Discounting does not require e-invoicing capabilities in order to work, the technology is essential for achieving the early payment discounts. Organizations need the speed and efficiency of electronic invoicing in order to really succeed in their early payment discount program, which ultimately, is where buyers and suppliers see the true value. E-invoicing also tunes suppliers into the electronic world where they can leverage the portal to request and accept early payments. Buyers are able to save millions in discounts and suppliers gain cheaper and easier access to cash. Simple!
Stay tuned as our interview with Maex continues. In the final installment, we’ll cover Taulia’s view on the history of Xign, e-invoicing, networks, trade financing, and related areas. In the meantime, we encourage you to check out our latest site, Trade Financing Matters, and a recent Spend Matters PRO research brief exploring all sides of the dynamic discounting opportunity.