Invoicing Discount Capture Goals: Taulia Customer Conference Dispatch

Earlier today, I shared some of the highlights from an e-invoicing and discounting program implemented by a major North American telco provider. The results of combining e-invoicing with discounting together helped accelerate the hard-dollar return the program delivered outside of just A/P processing efficiency. Less than 12 months into starting its Taulia roll out, the company is at a run-rate (which is increasing) that is capturing $150,000 per month in early payment discounts. The organization is using a sliding scale of discount options based on when suppliers select that they want to get paid with a maximum discount of 2% for selecting early payment as early in the invoice submission/approval lifecycle as possible.

Looking ahead, to help increase supplier adoption as well as invoice discount capture, the A/P group within the company is planning to drive the adoption of dynamic payment terms (DPT) in the contracting process in which suppliers sign up and “contractually agree that the buyer will pay every invoice as soon as it is approved in exchange for discounts.” In addition, the organization is looking to streamline document exchange and connectivity for its largest suppliers using EDI to connect billing systems and other environments, which is likely to drive additional discount uptake.

Curiously, at a different Taulia presentation in which the organization shared benchmarking data based on a survey of over 3,000 suppliers, it was the largest suppliers who were most likely to accept invoice discounts (albeit likely at lower APRs than other tiers of suppliers). Hence, driving direct linkages and connectivity that bridges e-invoicing (even in cases where EDI linkages exist) with the discounting and a supplier portal framework can be just as valuable (if not more) than encouraging adoption through aggressive onboarding efforts with mid-tier suppliers.

As a final near-term go-forward objective, the organization is looking to enforce a “portal policy” in which suppliers are directed to a web-based interface for nearly all forms of communication and document exchange with A/P. This includes complete automation through the portal for e-invoicing, PO look-ups/checks and updates to vendor master information (e.g., contact information, banking information, insurance/certifications, etc.).

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