Author Archives: David Gustin



Everything Procurement Should Know About Payments (Part 3): Challenges and Opportunities for Payment Operations

e-invoicing

As anyone tasked with extending and integrating a procure-to-pay (P2P) system to fully support the second “P” has no doubt learned, corporate payment processes and systems are highly complex — perhaps even more so than transactional purchasing activities. This Spend Matters PRO series provides a procurement-centric introduction to the topic of payments, offering a look into the payments lifecycle and how it integrates with core P2P processes and workflows.

Earlier installments (see Part 1 and Part 2) explored the invoice-to-reconciliation process, internal and external parties involved in core payments workflow and P2P technology best practices. In Part 3, we turn our attention to the nitty-gritty of managing core payment operations, examining a full list of the challenges companies face in confronting payments today, as well as the financial and operational costs of managing payments sub-optimally. We also provide an overview of shared services environments for payment operations while also exploring the many challenges companies face in attempting to drive payment process and system centralization generally.

Everything Procurement Should Know About Payments: Best-in-Class P2P Technology Capabilities and the Reconciliation Process (Part 2)

BuyerQuest

There have been two (somewhat bad) jokes around product naming since procurement technology adoption became widespread. The first was when SAP labeled its e-procurement product “supplier relationship management” (SRM), which was a misnomer, to say the least. SRM, which competed against Ariba, Commerce One and others at the time, was about managing transactional buying, not about strategic supplier relationships. The other naming “fail” was unfortunately more generalized outside of a single provider, and that was labeling the broader transactional procurement tech sector as “P2P,” with the second “P” standing for “payment.”

If there is a silver lining in this naming misstep, however, it’s that we have the power to actually do something about it today. P2P solutions are finally beginning to embrace the payment ecosystem more holistically, and procurement is taking an orchestration role in the process. This Spend Matters PRO series provides a procurement-centric view into payments, exploring the payments process and all that it encompasses through a “get smart” primer.

Part 1 provided an introduction to the topic and explored what e-procurement systems do (and do not do) to enable payment processes. It also explored what SAP Ariba and Coupa have developed from an integrated e-procurement, e-invoicing and payments offering perspective though various partnerships. The second installment in this series provides a summary checklist of best-in-class e-procurement and e-invoicing native payment capability and integrations (internal system and third party) to enable payments and an overview of the invoice to reconciliation process, outside of P2P systems alone. It includes an introduction to various electronic funds transfer (ETF) models, tax considerations, currency considerations and related topics. It also includes a look at all of the internal and external functions and parties involved in different stages of the reconciliation process.

Partnerships, SCF+ and More: Taulia’s Crossroads (Part 2)

crossroads

In the first installment in this series, we provided our own recent history lesson on Taulia and how it got to where it is today — and the crossroads it currently faces from a strategy perspective. As we wrap up our Spend Matters PRO update on Taulia, we explore a number of specific areas of its business today, including a deep dive into its SCF+ offering, a tech-enabled and simplified approach to reverse factoring for the long-tail supplier masses instead of just large vendors. We also explore how Taulia is currently positioning itself today as it engages customers and how, on many levels, its core offering is a Trojan horse for what it really wants to sell with partners (but why that foot in the door with procurement, IT, accounts payable and treasury is an important as a first step and how these different worlds are converging). Granted, it would be easy — and not incorrect — to observe that the broader e-procurement market and purchase-to-pay (P2P) market remains distinctive from Taulia’s core sector today. Yet going forward, one can make the case that the worlds of generic (indirect) and category-specific buying, transactions, financing and payment will come together. And this is where understanding Taulia's emerging strategy matters.

Taulia’s Crossroads: Both Directions Lead to Good Places (We Think!) — Part 1

Taulia

We had the chance to spend two days last week at Taulia Connect, the customer conference of one of today’s largest and fastest growing e-invoicing, supplier network and fintech providers globally. (One hundred customers may not seem like a lot, but in this sector, it is.) Despite its solid momentum since the last event in fall 2014 — including a 100% renewal rate — Taulia has introduced a materially evolved strategy and face to the market since the last time it shared its perspective and vision in this in front of their user, prospect and partnership base. This two-part Spend Matters PRO brief explores Taulia’s product, marketing and competitive evolution and what we perceive to be a current strategic crossroads. And we can’t help but provide some broader perspective and commentary on Taulia's approach to supplier networks, e-invoicing, discounting and supply chain finance — and how the firm is trying to disrupt a number of incumbent ecosystems (and different vendors) in more than one market segment it is competing in today and heading into tomorrow.

Spend Matters 50/50: Mastercard – A Provider to Watch in 2015

Mastercard is one of our 50 Providers to Watch. We will be highlighting 100 companies (50 to Know, 50 to Watch) from our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs.

As it relates to business finance, Mastercard is a dominant provider of various purchasing card products to help procurement and treasury manage spend.

Spend Matters 50/50: C2FO – A Provider to Watch in 2015

C2FO is one of our 50 Providers to Watch. We will be highlighting 100 companies (50 to Know, 50 to Watch) from our 2015 Spend Matters Almanac over the span of 100 days. Practitioners are encouraged to browse the categories listed in our Almanac to find the provider that best fits their needs.

C2FO developed an online marketplace that enables suppliers and big buyers to negotiate better payments terms in a live bid/ask environment. For those who are not familiar with what a working capital market is, in C2FO’s case, suppliers provide a rate at which they will discount their invoice for early payment. This is a significant point of distinction.

A Nightmare on Payment Street – The Supplier’s View of the Early Payment Maelstrom

Yesterday, I covered a number of challenges around the issue of early payment solution provider proliferation and supplier confusion. Yet it is excitement and change in the market that is in large part leading to the confusion itself. What’s driving part of the excitement – actually a large part of the excitement in procure-to-pay-based lending – is the data that sits inside networks like Tungsten, Basware, Taulia, Nipendo, Ariba, GT Nexus and others. The combination of this data with external data is nirvana for anyone with a doctorate in statistics or mathematics. As with program trading on Wall Street, you can model risk and behaviors.

Will The Plethora of Early Pay Techniques Give Suppliers a Nightmare?

Step back from the current craze around all the new financial technology solutions for companies to access cash, from e-procurement and e-invoicing solutions to marketplace lending and supply chain finance, and try and think about this from a logical basis – from the perspective of the supplier. You want to pay early. But by the time you figure out how to get it from all these solutions, you’ve logged into half a dozen or more solutions every day that are not directly integrated into your systems. You may even have to hire a few staff. Clearly, this is an area that deserves more attention, which suggests it might move to embracing a supplier-led ecosystem as well.

Tradeshift to Partner with C2FO, Extend Working Capital Access Across Network

Supplier collaboration platform Tradeshift announced Tuesday it would partner with C2FO to expand dynamic discounting solutions to a broader network of suppliers and buyers. The partnership will provide more suppliers access to the C2FO working capital market to improve cash flow and allow more buyers to increase pre-tax earnings through early repayment. The partnership can be summarized as follows: Tradeshift, the company that views itself as the B2B equivalent of Force.com, now provides an app for working capital through C2FO, the only solution provider that enables buyers to set the APR return and auction cash to suppliers based on the rates set by latter.

Sizing Up Tungsten’s Numbers: Invoicing and Trade Financing Market Implications

Two weeks ago saw a material drop in Tungsten’s stock price (over 20%) – a trend that continued early the following week – only to be reversed after a secondary offering that provided support for the stock (at the time of writing, the stock price had rebounded 25% off of its lows). But the initial downward stock movement almost has seemed detached from the revenue results of the business, which the firm said would beat guidance. However, there is other news in the story – much more news, in fact, which is far more interesting than the high-level numbers, or even the stock drop or appreciation. Moreover, just as Ariba was an important stock to watch as a proxy for the sector – and which we profiled when it was independent during most quarters – so, too, is Tungsten in the supplier network and technology-led trade financing market. In this Spend Matters PRO analysis and research brief, we consider some facts and figures surrounding Tungsten’s results and how we read into them from an overall market perspective spanning e-invoicing, invoice discounting and supplier network capabilities.

How Unsecured Payable Facilities Help With Bulk Purchase Discounts

Procurement organizations may be able to take advantage of volume discounts or quarter-end spends with their largest suppliers – if they can make it happen. Procurement may not be able to get the funding to make this a reality as treasury may not want to tap into its revolving credit facilities. So what are you to do? Check out the full article over on our sister website, Trade Financing Matters.

Pushing Early Pay Opportunities To All Suppliers

Regardless if the US government's SupplierPay initiative is successful or not, many Global 2000 corporations have developed a menu of early pay solutions. Buy-side techniques are centered around payable finance methods. Purchase-to-pay, e-procurement, e-invoicing and supplier network propositions are becoming more established together with early pay finance techniques. Large global corporations that use these networks to manage suppliers will enable their suppliers to receive early payment.