e-Invoicing Going to the Next Level

Markus AmentChief Product Officer@maex242@taulia

Agenda

• e-Invoicing - What Works and What Doesn’t

• Supplier Value Propositions

• Dynamic Discounting & Turning Issue Into Opportunities

• Real World Success Stories

• Questions

A simple chainThe ultimate goal: Get rid of paper, manual keying, exceptions and calls

How to get there: Receive e-invoices in a virtually perfect quality

How to achieve it: Supplier adoption

What drives adoption:Value for supplier

What is E-Invoicing?

What e-Invoicing is Not:o Scanned/imaged paper invoiceso OCR’ed paper invoiceso Emailed PDFs

Sending and Receiving Invoices

Electronically

Completely Eliminating Paper

Data Stays Data: No Data Entry or

Correction

E-Invoicing

Adoption of E-Invoicing in the Last Year

Source: PayStream Advisors, 2012

In Use Deploying Evaluating Not Planned

21%

8%

42%

29%

Paper Remains Dominant

Source: PayStream Advisors, 2012

Methods Used to Trade B2B Invoices

Fax Email E-Invoicing Paper

9%13% 14%

64%

The e-Invoicing Challenge:Replacing Paper

Customers:o ERP Input formats are proprietary o Cost and complexity of working with hundreds of suppliers

Suppliers:o Cost and complexity of customizing for clientso Billing systems output invoices in proprietary formats

E-Invoicing Adoption Barriers

No executive sponsorship

Lack of understanding of current available solutions

Lack of resources to manage automation

We do not think there will be an ROI

Lack of budget

Current processes work

6%

6%

7%

16%

18%

23%

Source: PayStream Advisors, 2012

Supplier Value Propositions

1. Complete Solution Offering

2. Covers all Transaction Types

3. Interoperability

4. Transparent Vendor Portal

5. No Supplier Fees

6. Financial Value

Supplier Value Proposition 1: Complete Solution Offering

o e-invoicing, incl. flipping a POo Invoice statuso Remittance/payment detailso PO updates, confirmation & historyo Address changes, bank changeso Online Dispute resolutiono Online W9/1099o ….

o Focus on e-invoicing– Connectivity often one-way

street: “Incoming” only– No additional data on the

portal or network

Current New

Supplier Value Proposition 2: Covers All Transaction Types

Current: New:

ERP

• Status?• PO?• Payment Details?

Network or

Platform

ERP

• Status!• PO!• Payment Details!• History!

EDI

ERS

PAPER

Network or

Platform

Scope limited to invoices submitted through network

Comprehensive visibility forall invoices

Supplier Value Proposition 3: Interoperability

Current: Supplier accesses each platform used by its customers

New: One access point

Network or

PlatformNetwork or

Platform

APINetwork or

Platform

Network or

Platform

Supplier Value Proposition 4: Transparent Vendor Portal

• Instant visibility into invoice status

• Payment certainty and details

• Easier and faster access to cash

• Online collaboration with your customers means no more calls into AP

Supplier Value Proposition 5: No Fees

• Simply put – suppliers will not use a platform that charges a fee

• More and more providers offer electronic invoicing free of charge to suppliers

Top Two Supplier Pain Points

1. When will you pay me?

2. Can you pay me earlier?

Supplier Value Proposition 6: Financial Value

Supplier Value Proposition 6: Easier Cash for your suppliers

• Factoring market is growing 28.6% annually and exceeds $2.3 trillion

• Credit Card: 15% industry average APR 

• Banks are reluctant to lend to SMB's, and often for steep rates

• Small business loans are effective for large capital expenditures but are generally not appropriate for day to day operational expenses 

Greater Supplier Value = Greater Supplier Adoption

Supplier Adoption

1. Complete Solution Offering

2. Covers all

Transaction Types

3.Interoperability

4.Transparent

Vendor Portal

5.No Supplier Fees

6.Financial Value

There Remains Another Problem…Banks Benefit – Not Buyers or Suppliers

Invoice-Net 60

Suppliers Factorsat 20% APR

Buyer earns 0.5% annual interest until due date

SUPPLIERInvoices Buyer

LARGE BUYERInvoice Approved on Day 5

BANK

Buyers Have Record Amounts of Cash

Status Quo is Ineffective

Cash as % of Assets

2002 2006 20126% 8% >10%

4-Week Interest Rates2002 2006 20121.7% 5% 0.1%

Days Until Approved Payment2002 2006 2012

20 days 30 Days 45 Days

Typically Invested at Near-Zero Return

While Invoices are Ready to Be Paid!

The Solution: Dynamic Discounting• What is it: expanding beyond the typical 2% net 10 discount terms to capture more discounts

• The Benefit: greater returns on cash and increased supplier adoption of granting discounts

Dynamic Invoice Discounting Represents a Win-Win

• Enables large companies (“Buyers”) to save money and improve return on cash by paying suppliers early

• Enables smaller companies (“Suppliers”) to access less expensive financing alternatives by accepting time-variable “Dynamic Discounts”

Imagine…paying your suppliers less and having them thank you

Turning Issue to Opportunity

Invoice ApprovalPayment (due date)

0 15 60

Opportunity

days

Terms (days): 120 Anheuser-Busch 60 Hertz 56 Industry Average 45 Apple

Suppliers are willing to offer attractive discounts for early payment

- Integrity and Reliability ensured

Will Buyers Generate Acceptable ROI?

“This Solution has saved us more money quicker than anticipated”

- Ben Shaffer, PG&E

Economics for PG&E:Break-even: 6 weeks after go-live

ROI: >2000% in first 12 months

$31.4m

$10m$5.8m

$3.9m

Dynamic Discounting Solution Deployed ➘

Will Suppliers Actually Enroll?

Results:• Go-live 3.5 months after contract

signature: • 45% of previous networked suppliers

converted within 1 week• 99% converted within 5 weeks• Now enrolling non-previous networked

suppliers: 30% of invited enrolled within 1 ½ weeks

• $5M in discounts/Billion in spend• 7 Employees in AP department

Is the Process Timely?

“Since go-live 3 months ago we’ve saved $140K – that’s more than $500K in annual savings – and that’s just the tip of the iceberg. We expect to achieve annual savings of $1.5 – 2 million. For a program with minimal up-front investment that’s given us a very rapid return on our investment.”

And furthermore, “we’ve been surprised how enthusiastic our suppliers have been.”

- Robert Locke, Director of Strategic Sourcing and Supplier Diversity

Our Vision of Tomorrow for You as a Buyer

Free E-invoicing and Visibility Portal

Increased profits

Start electronic immediately

Great supplier relationships

Free for your Suppliers and free for you

From Dynamic Discounting

Onboarding Guarantee

Much better Supplier Value at no cost = win-win

Questions?

Markus AmentChief Product Officer@maex242@Taulia