The Power of Complete AP Automation

Tradeshift & Taulia WebinarSeptember 25th 2012

Your presenters today

Christian Hjorth

Chief Commercial Officer, Tradeshift

Been with Tradeshift since the early start and came from Salesforce.com and SAP

Joe Hyland

Sr. Director Marketing, Taulia

Heads up go-to-market strategy; ran P2P marketing at Bottomline Technologies

Today’s Agenda

• The Challenge and the Opportunity

• Tradeshift Business Cloud

• Taulia Dynamic Discounting

• Joint Value Proposition

• Q&A

The Challenge and the Opportunity

Your Situation Today• Lots of paper invoices• Fragmentation of channels• Poor supplier adoption• Error prone process• Time consuming communication with

suppliers • Losing $ by not capturing supplier

discounts

Imagine if…..

• You did not have to deal with any paper invoices

• Invoices arrived within minutes of them being sent by ALL your suppliers

• Your suppliers had visibility into real time invoice status

• You could enforce your procurement process through invoice validation

• You could automate and maximize supplier discounts trimming millions off your AP spend

Tradeshift’s Approach to E-

Invoicing

Tradeshift

At Tradeshift we have the ambition to change the way business is done by allowing organizations to

exchange invoices for free.

We connect businesses to all their suppliers and customers regardless of company size, not only

saving cost but also ensuring they get paid faster at both ends of the supply chain.

e-invoicing has failed to keep customers happy*

Only 12% Said their current solution was very satisfactory.

Efficiency and costAre the biggest barriers to becoming a universal solution.57% agree that adoption would be widespread if it was free to suppliers.

47% think its pointless E-invoicing is pointless without widespread supplier adoption and addressing. These barriers are going to be key in reaching that stage.

*CFO research across 600 organizations Dec 2011

We address the problem with 3 key approaches

1. We make it FREE for suppliers to use

2. We make it EASY and provide many different channels for suppliers

3. We make it simple and efficient for you to ENGAGE and MONITOR progress

Why e-Invoicing Needs to be Free

• Very rarely is supply chain adoption over 10% due to high costs to suppliers

• The “soft” part of the business process like phone calls and email is typically more than 20% of the total business cost

• These networks typically get 90% of their revenue from their suppliers, this creates a massive barrier for adoption

• How much cost do you want to push down the supply chain?

Where do the costs go?

Existing Solutions

How we approach the supply chain

# of invoices(per year)

# of suppliers

Guided integration services and self-

service configuration

Plug & Play connectors to large accounting systems,

self-service configuration and

printer driversState of the art invoice

application or CloudScan™ service

Use of Web Portals or Scanning SolutionsTradeshift Integrated Approach

The Network Engagement Tool

• Manage your whole supply chain invoicing in one tool

• Segmented messaging for different supplier groups

• Trigger based campaigns based on supplier actions

• Real-time invoice validation using the business firewall

B2B communication:

Status change, messaging, etc.

Apps: Applications for extending the functionality of the platform. Used by Tradeshift and partners

Tradeshift Instant

Payments - Supplier finance

programs

The Unique Business Model is an Ideal Platform for Launching Supplier

Finance Programs

Business documents:

Transmission of quotes, POs,

e-invoices, credit notes etc.

Taulia’s Approach to Dynamic Discounting

Today’s Invoice-to-Pay Process:Banks Benefit – Not Buyers or

SuppliersInvoice-Net 60

Suppliers Factorsat 20% APR

Buyer earns <1% annual interest until due date

SUPPLIERInvoices Buyer

LARGE BUYERInvoice Approved on Day 10

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!

Dynamic Discounting Represents a Win-Win

Imagine…paying your suppliers less and having them thank you

• 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”

How Does it Work?

Buyer sets interest rates and activates

suppliers in ERP

Approved invoices are offered

automatically for Instant Payment

Supplier selects payment date and accepts

discount

Payment schedule updated in SAP

according to agreed terms

1

4

3

2

Solution whereby suppliers are offered early payment based on a discount rate - set by the buyer

3.0%

2.0%

1.0%

0%0 10 20 30

Days

$$

$

“Hit-or-miss” discount

Sliding scale discount

Leverages a sliding scale discount

Enable the Buyer to realize a discount throughout the entire payment period

Improving Traditional Discounts

Low

High

Strong

Poor

Supplier credit rating

Buyer discount potential

Segment suppliers and price discounts to their alternative funding cost

Make them dynamic Price to opportunity1 2

Benefit to Buyers and Suppliers

Buyer

Supplier

Enables corporate treasurers to generate

risk-free double-digit returns on available

liquidity by paying suppliers early in

exchange for a discount

Offers suppliers a less expensive alternative

to financing by accepting time-variable discounts on

instant payments

Buyer objectives

Treasury – Increase returns on available cash with complete control of the program

Procurement – Scale discounts across 100% of supply chain and motivate suppliers to complete e-invoicing on-boarding

Finance – P&L cost savings and accurate cash flow forecasting

IT – SAP certified solutions enable rapid deployment with limited drain on internal IT resources

Supplier objectives

Faster access to cash

Cheaper than funding alternatives

Helps to meet quarterly targets/bonus targets

More convenient than funding alternatives

Provides the right incentives for buyer

Joint Tradeshift/Taulia Value Proposition

The perfect partnership

• Higher e-invoicing adoption from all supplier segments due to lower barriers (more channels)

• Faster invoice approval, which increases potential discount captured

• Maximize discounts in all supplier segments

• Offer suppliers to get paid instantly• Tools to promote discounting offers to both

active/non active suppliers

Business CaseImpact from e-invoicing

Impact form Dynamic Discounts

Reduce processing cost in AP

• Eliminate retyping of invoices (65%)

• No error handling of incorrect invoices (20%)

• Reduce supplier requests (15%)

Discount spend and pay less

• Total spend EUR 1bn • Accelerated spend EUR 200m• Average discount 2%• Days accelerated 30

Annual cost saving:EUR 300.000(total invoice volume 100.000)

Annual cost saving:EUR 3.8m (23%)(assuming 1% offer cost on cash)

Example Example

Q&A

Thank You

tradeshift.com/enterprisetaulia.com