Taulia – million dollar guarantee from dynamic discounting

We've talked about dynamic discounting a number of times here in the context of an extension of e-invoicing benefits into something that can be very tangible. The basic proposition is that buyers can receive discounts on invoiced amounts in return for paying early. Bbut rather than it being a fixed “2% discount for 14 days payment” which isn't exactly new (I remember that from my first role buying dairy products), it is “dynamic” in the sense of different discounts can be applied by the buyer, or even bid for by suppliers, at different times and for different suppliers.

Anyway, Taulia, one of the interesting players in this market, has a new proposition which my US colleague Jason Busch has written about here.

As he says, Taulia “is stirring up the accounts payable, treasury and procurement pot with its latest offer: a guarantee of $1MM in dynamic discount savings capture in the first year of implementation”.

Jason points out that baselining and measurement in this field are much easier than in other types of gain-share arrangements such as category management “savings” – there is a clear invoiced amount and a measurable and tangible discount. This is real cash.

“This announcement will help showcase dynamic discounting’s potential to bring material savings for companies, calling attention to a cause that finance and procurement executives alike should come together more frequently on. Better visibility into liabilities, forecasting and overall AP efficiency is just the icing on the e-invoicing and discounting cake. Savings should come first and guaranteed programs will bring attention to the potential".

There don’t seem to be too many catches in this. As Jason explains.

“Specifically, according to Taulia’s offer, they “guarantee $1M in DD capture in first year, if this is not realized, client pays no additional fees until they hit the $1M savings mark.” The fine print is simple. Customers must:

  • Use Taulia e-Invoicing

  • Have over $3 billion in annual spend in scope

  • Adhere to TAULIA NOWTM best practices for supplier onboarding”

Do read his full article – he also refers to a client of Taulia who give some real-life views of the experience. It is interesting reading and if you’re not already looking at it, it's well worth considering either this offer or the general concept of dynamic discounting.

 

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