Four ways to balance liquidity and supplier health

Summary

Find out how treasury managers, risk officers directors, and supply chain managers can use SAP Taulia to protect liquidity while building a resilient supply chain. This blog gives you practical advice on how to automate strategies across treasury, procurement, risk, and operations. Using SAP Taulia organizations can safeguard cash reserves while ensuring their critical vendors remain financially healthy.

Contents:

Design an automated hybrid funding workflow

Build a dynamic supplier segmentation matrix

Bolster supply chain risk management with behavioral risk monitoring

Sync demand forecasts to keep suppliers informed

Operational summary checklist by function

For treasury, risk, and sustainability teams, supply chain risk management isn’t just about checking a box on a quarterly compliance report; it’s also a daily balancing act that leaves zero room for complacency.

Naturally, companies need to protect their own cash reserves. But they also need to make sure their business-critical vendors don’t run out of liquidity. A situation that can lead to costly shipping delays and even halt production.

This step-by-step guide is designed for managers on the front line. It explains how companies can use SAP Taulia to automate their cash flows, predict vendor risk, and build more resilient supply chains.

Whether you’re in treasury, supply chain, or risk, find out how SAP Taulia helps you meet your company’s liquidity needs while strengthening supplier health.

1. Design an automated hybrid funding workflow

Traditional supply chain finance (SCF) programs are notoriously manual. But with a sophisticated self-service solution, you can automate key processes, optimize your daily working capital without drowning in admin work, and scale up easily.

Of course, not all early payment models are the same. If you have excess cash available, Dynamic Discounting allows you to pay suppliers early, securing risk free returns and a reduction on the cost of goods sold. If you’re looking to preserve liquidity and still want to offer early payments, you’ll need an SCF program using third-party funding.

The good news is you don’t have to choose between the two models. With a flexible funding model, you can switch between funding sources when needed.

How can SAP Taulia help treasurers and cash managers?

Use SAP Taulia to design an automated treasury working capital workflow:

• Configure funding switch: Use automated treasury rules in SAP Taulia to switch seamlessly between funding sources. Choose between Dynamic Discounting, which automatically uses your excess cash to pay suppliers early, and SCF, which taps into SAP Taulia’s third-party banking syndicate.
• Establish rules: Standardize your cash preservation process by setting up SAP Taulia to apply your baseline payment terms (e.g. Net 90) automatically within your SAP ERP system.
• Automate early payment offers: You can also set up the solution to offer early payment options to your suppliers on approved invoices. This eliminates the need for manual back-and-forth interactions.

2. Build a dynamic supplier segmentation matrix

Companies often want to pay their key vendors sooner than non-critical vendors in order to protect vital relationships and secure a priority service. But in practice, applying this can be a major source of friction.

If you want to deploy targeted terms to your suppliers, you first need to map your supply chain and segment your vendor database into different tiers:

• Transactional or commodity partners: These could include suppliers of standard packaging, office supplies, or services that can easily be replaced.
• Strategic or bottleneck partners: These can include manufacturers of custom components, or sole source vendors that are uniquely able to provide a particular item or service.

How can SAP Taulia help vendor managers and procurement leads?

With SAP Taulia, you can set up a specific set of rules for your strategic suppliers to protect their operational capabilities. This might include more favorable early payment and dynamic discounting rules.

For transactional suppliers, you can opt to apply standardized, extended terms – such as Net 60 or Net 90 – in order to maximize your own working capital.

3. Bolster supply chain risk management with behavioral risk monitoring

Changes in supplier behavior could indicate that your access to business-critical goods and services is at risk of disruption. Operational supplier risk assessment is therefore crucial for evaluating your suppliers’ financial health.

But static financial health metrics – such as the current ratio, or operating cash flow – are lagging indicators. This means that by the time a supplier’s quarterly statement shows distress, the company may already be insolvent. Predictive vendor risk analytics are needed to identify supplier risks before they become a problem.

How can SAP Taulia help vendor risk and compliance officers?

Use SAP Taulia Suite Analytics to detect early warning signs with real-time behavioral monitoring.

For example, a supplier that has historically been stable might suddenly start accelerating 100% of their invoices for early payment. Or a supplier might start accepting steeper discounts than usual.

With SAP Taulia, you can set up automated risk alerts to flag up these cash-seeking behaviors. Your team can then proactively assess the supplier’s financial health before any disruption occurs.

4. Sync demand forecasts to keep suppliers informed

No financial platform can fix a relationship that’s plagued by poor communication. Without a clear understanding of your future business needs, suppliers are at risk of tying up their working capital in expensive, stagnant safety stock.

To reduce your supplier’s cost of doing business and position yourself as a customer of choice, you need to keep suppliers informed and eliminate the guessing games.

How can SAP ERP and SAP Taulia help supply chain and operations managers?

• Share real-time demand data: Push three-to-six-month rolling demand forecasts from your ERP out to your strategic suppliers. Then use this shared forecasting to help suppliers align their manufacturing runs with your real-world demand.
• Earn the ‘relationship premium’: Alongside operational predictability, offer your strategic suppliers financial flexibility via SAP Taulia to secure your position as a customer of choice. When global materials are running short, your orders are more likely to be filled first.

Operational summary checklist by function

✔ Treasury: Connect SAP Taulia to your ERP and set up automated SCF/Dynamic Discounting funding rules.

✔ Procurement: Segment the vendor database into strategic and transactional buckets and apply tiered payment terms.

✔ Risk: Configure SAP Taulia dashboard alerts to track sudden spikes in early payment requests from suppliers.

✔Operations: Establish a process to share ERP demand forecasts regularly with key suppliers.