Taulia Connect and an update on Dynamic Discounting David Gustin - February 16, 2016 2:17 AM | Categories: Dynamic Discounting | Tags: Greensill Capital, Lavante, Taulia Connect I am excited to be heading to San Francisco to network with Taulia, its’ customers, prospects and partners, as well as other analysts to hear about the latest trends from this financial supply chain company. Hearing from both other vendors and banks, there is still a healthy degree of skepticism around a company’s implementation of AP automation and dynamic discounting. Some of the comments I hear from this crowd include: How is dynamic discounting really appropriate when our bank data says payment terms for mid market are 30 to 35 days. This is based on their actual spend data coming out of ERPs that the bank receives on invoice level for each of their customers. The concern is 25 to 30 day terms are not enough for suppliers to want to accelerate payment. Interesting, as I was recently contacted by The Association for Packaging and Processing Technologies who called out General Mills for pushing vendors to 60 days. In their note to me, they said, “General Mills writes: “A recent benchmark study confirmed that our current payment terms are significantly shorter than the industry standard. As a result, we have made our standard payment terms a minimum of net sixty (60) days…”In addition, the company is adopting an onerous capital equipment payment scheme. Their 30/60/10 payment schedule is untenable for any small business.” This solution is only for Indirect spend. When you get to both direct spend and cross border trade, it falls apart for many reasons, mostly related to how credit, capital, and bank markets function. But that is changing, as vendors add new functionality to process direct material transactions and partner with the third parties to provide more efficient priced capital. Suppliers would like to have a multi-buyer solution – not a portal by portal solution with each buyer. The point is that suppliers do not have bandwidth to make finance decisions invoice by invoice for each buyer. I guess if they decide to OPT-In to every buyer program offered, that’s a non event. I discussed the issue of supplier portal multiplication here and here Does Treasury want to use their surplus cash to fund their supply chain? Depending on hurdles rate set by Treasury which in many cases can set so high that it may not be cost effective, most surplus cash is a few million at best. While many agree dynamic discounting and transactional finance has become more important to an RFP process for AP automation for buyers, there is a question from some about does a company need another best in class solution to implement for IT. I was told by more than one vendor that a few of their customers did their own DDM portal and self fund, and don’t care how many suppliers sign up, they just want to have it to appease management. These are just some of the issues I will be exploring with Taulia’s clients and their suppliers next week. I am excited to hear about Taulia’s partnerships, with companies like Greensill Capital and Lavante as well. I look forward to the hospitality of Taulia and a city where I can grab an Uber (note: Vancouver are you listening?) Don’t forget to sign up for TFMs weekly digest delivered to your inbox every Monday here Follow me on Twitter @TFMatters Related Articles Basware ‘Redefines’ its Business Strategy, But We Have More Questions… Taulia Breaks Its Marketing Silence, Announces Q4 Momentum and More Taulia Announces $46M in Series E Funding Round KPMG & Taulia Team up to Target E-Invoicing, Supply Chain… How Banks are Closing Payable, Receivable & SCF Products Gaps Even McKinsey Does Not Fully Understand Supply Chain Finance Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of new posts by email.