How Taulia helped Red Rock Oilfield Services fill the cash flow gap

Challenge:

Several of Red Rock’s customers extended payment terms from 30 to 45 days. This 15-day extension resulted in a cash flow gap that caused problems for Red Rock when it came to paying their overhead expenses and accounts payable on time.

Solution:

To solve this problem, Red Rock uses Early Payments, a Taulia feature offered by its latest customer, a $2 billion oil and gas company headquartered in Dallas. This enabled Red Rock to accelerate payment of certain outstanding invoices. “When our receivables were stretched from 30 to 45 days, this made it difficult for us to pay our utilities, taxes, and suppliers and even meet payroll,” says Brenda Conner, Red Rock’s bookkeeper.

Conner explains how Red Rock uses Taulia Early Payments: When she sees that there will be a cash flow shortfall in the near future, Conner clicks on the Early Payments tab in the Taulia supplier portal.  She can then see all of Red Rock’s outstanding invoices with this customer, including the amounts due and the dates when they’re scheduled to be paid.

Next, Conner scans the system looking for an outstanding invoice eligible for Early Payment that will provide enough money to meet the cash flow shortfall. She then presents the option to Red Rock’s CFO, who makes the final decision about taking the Early Payment. If the CFO approves it, Conner selects the invoice and indicates on which day Red Rock would like to receive payment. In as little as two days, the funds are deposited into Red Rock’s bank account.

Impact:

By using Taulia Early Payments, Red Rocks has been able to bridge cash flow gaps. “When we’ve used it, Early Payments has enabled us to meet our payment obligations without having to borrow money from a bank or delay these payments,” says Conner.

Payment terms for Taulia Early Payments are dynamic, which allows Red Rocks to determine how quickly they want to get paid and at what rate. So to keep the costs down, Conner always chooses the oldest outstanding invoices for Early Payment.

Conner also likes the fact that she can use Taulia to check on the status of outstanding invoices at any time and see when they’re scheduled to be paid. She has even discovered that certain invoices were not in the system, in which case she alerted the customer, and payment was made quickly.

And with Taulia, Red Rock no longer has to key in all of their invoices. “I used to have to enter piles of invoices every week, so this has saved me a lot of time,” says Conner.

“When our receivables were stretched from 30 to 45 days, this made it difficult for us to pay our utilities, taxes, and suppliers and even meet payroll.”

• Brenda Conner
• Bookkeeper