California-based Taulia's cloud-based solution helps organisations by automating and maximizing supplier discounts.
According to the company, it gives suppliers the ability to get paid faster in exchange for early payment discounts, which can increase "productivity, lower costs and simplify outdated business practices".
We speak to Taulia's co-founder and Chief Product Officer, Maex Ament, on the company's solution, 'Dynamic Discounting' and its plans for 2014.
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Maex Ament: Taulia's beginnings lie in a challenge that was present in nearly every Accounts Payable department in the world - the approval, processing and payment of an invoice. We saw a unique opportunity to fix what we believed to be an inefficiency in the global financial supply chain.
Huge corporations had unprecedented cash on hand, on which they were earning less than a 1% return, whilst their suppliers (the world's small businesses) were cash-poor and in need of financing.
In today's economy, this practice threatens the financial health of small businesses, who are forced to obtain high interest loans or resort to credit card borrowing in order to survive. So with that - namely the notion that the supply chain was broken, and there was opportunity for more efficient, effective, and all around better business processes - Taulia was founded.
We knew that if payments between the world's biggest buyers and their suppliers were to be handled more quickly, the result would not only be a mutually beneficial outcome, but would also help the worldwide economy.
With our dynamic discounting product, we give large organisations the ability to pay approved invoices early in exchange for a discount. It's a true win-win - suppliers gain faster, easier and less expensive access to cash, while buyers save millions and improve the financial health of their supply chain.
TRP: What is Dynamic Discounting?
MA: Dynamic Discounting is actually quite simple. It gives suppliers of all sizes the opportunity to be paid as early as they want and in return, they provide a discount for the faster payment.
Taulia's software helps to automate this entire process - making it as easy as possible for buyers to offer early payments and suppliers to choose to accept these offers.
Through our supplier portal, suppliers are able to submit electronic invoices, which are then transmitted to the buyer's ERP system and approved for payment. Suppliers are then able to request an early payment, choosing the day in which they want to be paid.
So if they could use some extra cash for a large production order, or they want to pay out bonuses but won't have the liquidity at the time, they can plan ahead, and request to be paid early on certain invoices.
The buyer can set the early payment rate in their ERP system, so say they want to offer early payments at 8% APR (much lower than loan or credit card rates), the supplier sees a sliding scale of the associated daily discount should they choose to take the payment early. The earlier the payment, the bigger the discount.
Our primary focus has always been to transform this process into a mutually beneficial situation for both buyers and suppliers. Not only does dynamic discounting strengthen the buying organisation's cash positions, but it also injects capital into the supply chain and boosts the economy.
When large buying organisations implement Taulia, they receive a comprehensive end-to-end payables solution for themselves, as well as their entire supply chain. Taulia's SaaS solution connects seamlessly with any organisation's Enterprise Resource Planning (ERP) system to bring their data to the cloud and make all relevant information available to their supply chain.
Taulia's complete offering, Taulia Business Exchange, includes a supplier portal, electronic invoicing, supplier information management and supplier financing that can be installed and running in less than 3 months.