On Tuesday, March 11th, Taulia’s Vice President of Client Services, Matt Wright, led a learning lab at the sharedserviceslink European Summit for Leaders in Shared Services and Outsourcing event in Guoman Tower Hotel, just opposite London’s iconic landmarks, Tower Bridge & the Tower of London.
Matt described how strategic shared services organizations (SSOs) can use supplier financing as a revenue generator. He described the existing shared services environment, the pressures of complexity, cost reduction and finding added value.
- Shared services constantly needs to evaluate and optimize the way they interact with their supply chain and supplier community
- Using a cloud-based P2P system, SSOs can enhance the speed and productivity of electronic processes to support early payment discounts, saving millions
- Electronic purchase orders and invoicing, dispute management and supplier information management brings huge efficiencies and cost savings to an SSO
- While automating the transactional side of the financial supply chain is key, the real transformation comes with introducing a P2P and supplier financing system
Question from the audience: “If I use my own working capital to fund early payments, won’t this negatively affect my days payable outstanding (DPO)?”
The buyer can use its own excess working capital to pay early, but yes, this can lower DPO. However, the profit from the discounts captured go straight to the bottom-line and the returns are much higher than those earned from holding onto cash in this low interest rate environment.
However, if a company is DPO sensitive, let’s say publicly traded, they can now use 3rd party capital through Taulia Enhanced Discounting. In essence, this means the buyer’s DPO is not impacted but they are still able to still offer the early payments, and capture early payment discounts, on all approved invoices.
Want to learn more? Catch us at our other events and webinars.