11 Apr 2012 How dynamic discounting saved millions
I’ve heard more reasons why not to use supply chain finance than I’ve heard good reasons to use it. The problem appears to be that those advocating it are the sales people. They would say that wouldn’t they? And those arguing against it are the accountants and treasury managers – and they’re the “experts”.
What we don’t get to hear is a real example of what it can deliver.
Supply chain finance is in its infancy. Sure there have been products around for ages that do some of what today’s products can do but the ability to leverage large volumes of invoices and to work collaboratively with suppliers to generate value is really only possible in modern, sophisticated, joined up supply chains so there are few reference to work on. Which is why it great that Taulia have unveiled one of their success stories.
Although they remain guarded about the some of the detail, Taulia have been able to reveal that they have enabled a large Fortune 500 utility company to realize $millions in annual savings through the use of their Dynamic Discounting platform. Going live with the solution just three and a half months after contract signature, the company achieved return on investment beyond 100% in just a few weeks and today, Taulia’s solution is on track to process close to 200,000 invoices a year for the company.
Markus Ament, Chief Product Officer at Taulia commented on the success story: “Although this large utility had employed Dynamic Discounting with a portion of its PO invoice spend, they wanted to reach their entire supply base and address all invoices with one complete end-to-end solution. Taulia’s unified platform allowed the company to offer a simple, straightforward solution to every supplier on every invoice.
“We are proud that Taulia’s solution expanded supplier adoption. Interestingly, the utility was also able to realize greater returns than before from existing suppliers, based on those suppliers opting for larger discounts in return for receiving payment even earlier than the discount window of previously agreed terms.”
There are still skeptics who don’t get supply chain finance. Maybe they’re just in denial. But faced with examples like this, more CEOs and more shareholders will challenge the accountants and treasury managers who still sit on the fence and we’ll see more adoption of what, in many circumstances, is a no brainer.