Earlier this week Taulia hosted the Working Capital and Supply Chain Finance Lab at Eurofinance’s virtual event ‘International Treasury Management Week’. Delivered online, across one week, this, now digital event brought together thousands of treasurers from around the world to gain insights from their peers at different points of the pandemic curve.
On day one, Taulia led an hour long panel discussion on ‘Supply chain finance: suppliers and sustainability’. The line up featured the following suppliers who have used early payment to their benefit. The panel discussion was moderated by Michael Rieskamp, MD of Europe at Taulia.
- Rocky Schmidt, MD, Karet Trading
- Sandeep Shroff, Founder & CEO, MyStartUpCFO
- Erik Putter, Senior Finance Manager Europe, World Wide Technology
- Mihaela – Adriana Maftiean, Senior Accounts Receivable Manager, Huawei Technologies
We first heard from the panel about how they got introduced to Taulia and where they’d used early payment to manage their business and working capital
Rocky: Walmart actually introduced Taulia to us. We had such a bad history that financing was impossible. We needed to use our own cash to make our business viable. Walmart had Taulia explain the whole process to us at the beginning of last year and we’ve been using it ever since.
Sandeep: We were introduced to Taulia as we work with very small companies, who are always in need of cash. They sell into very large organizations so having the early payment option is a big deal. For most of our clients the only options we had previously were to take equity funds from private venture capital money or venture debt money. Bank financing is not even an option because they are generally quite small companies and have no credit history. Early payment is literally a life saver so we use it quite a bit to help bring our cost of funding down.
Another one of our issues is manpower. Since our companies are small, they don’t have large accounting and finance teams. We play that role for them, but they also don’t want to pay us to spend our time chasing payments. Having an automated system like Taulia means that clients can simply go into the system and choose their payment terms. It is a more systematic and streamlined process, which results in a lot of time saving and transparency too.
Erik: Our industry is pretty much dictated by the original equipment manufacturers we work with. The very large tech providers demand 30 day payment terms and our customers typically like 60 day payment terms. In the service provider environment it’s even longer – I’ve seen up to 120 days. We’re doing about 12 billion turnover, so imagine a scenario where we need to pay our suppliers in 30 days, customers pay us in 60 days…and we still need to bridge this gap of 1 billion. On the vendor side we can work with banks and get debt purchased via banks and pay them instead of the supplier directly. On the customer side we can work with companies like Taulia, who have been very supportive of our move into the service provider world where there are such extended payment terms. Having an early payment solution means being able to manage our cash in a much better way. Once I get the invoice approved and can pull in the cash whenever I need it.
Panellists were then asked to comment on the pros and cons of using an early payment program
Mihaela: In the telco industry it is very common to use an early payment program because they support being able to access cash when it is needed the most. We have quite a long history with the Taulia solution. Taulia has given us better visibility on our accounts receivables, helped shorten our DSO and increased operational efficiency. This has been facilitated by the Taulia portal, which allows each company to choose when they want to get paid, in an automated way. Taulia’s early payment program provides a flexible solution and it is fully dedicated to our customers needs. It gives us more speed, simplicity and helps us to manage our working capital better, meaning our business runs smoothly. I’d also like to highlight some new functionality within the Taulia platform, namely the automatic payment allocation module and the automatic payment reconciliation module, which have really added value to our business. From these two modules, we can immediately identify the invoice deviation and focus on the root cause of the gaps in our cash flow. In the current environment of a global pandemic, there are no cons to using early payment.
Rocky: As Sandeep mentioned, the smaller companies will really feel it. We don’t have massive finance departments. If you want to meet the treasurer, that’s me, if you want to meet the accountant, that’s also me. We are preparing to go into our peak season after almost having shut down for the last four months. Using Taulia means I can just go into the portal, see what is due and can turn my cash in two or three days. Without being able to turn my cash quicker than I can pay it out, I wouldn’t have a viable business. I’m struggling to find anything to complain about with Taulia. It’s a system that works for my small business and has saved me in a lot of ways.
Erik: We have our cash flow forecast available, we see which currency we need to be paid in and based on that we see whether it makes sense to use early payment. Typically it is because the fee is reasonable and it just makes sense to bring in the cash as early as possible. When I speak to a lot of customers I always promote Taulia simply because it works much better than factoring which is so expensive. We’re trying to get as many customers on the Taulia platform as possible simply because we can manage our cash flow in a much better and more efficient way. Taulia has been very supportive of that.
Panelists were then asked to speak about their experience working with Taulia (as suppliers)
Mihaela: My experience has been great. The Taulia team are very professional, experienced and dedicated to their customers. The onboarding process was very fast and easy, the portal is easy to access, flexible, user friendly and multi language. Also the fact that I can access it whenever I need it, wherever I am is great. It can also support high volume transactions.
Sandeep: My experience initially started out quite negative, but it was interesting to see how Taulia were able to step in and turn it into a positive. About three years ago, we were a supplier to a large international telco and a large payment (in the millions of dollars) got stuck. We were at our wits end and the customer mentioned that the issue might be on the Taulia end. At the time I was working in San Francisco. After a quick web search I realized that I was two blocks away from the Taulia offices. So I decided to head over there and speak to someone in person. I was then connected with the VP of customer service and VP of engineering, who sat down with me and were able to help me work through a system bug. Within 48 hours I had the money. So while our onboarding process was not the smoothest, the way Taulia handled it and how everybody jumped in to solve the problem, made it a very pleasant experience in the end. I deal with very small companies where it’s less about cash being king. Cash is oxygen. So for us it’s very important that payments show up on time. I was very happy with how customer-centric the Taulia team were and we’ve gone on to use Taulia with many more customers since.
Erik: The experience that I’ve had with Taulia has been fantastic. We’ve had a few invoice issues but the team jumped right on then and solved the problem within hours. In our business cash is king. Most of the companies don’t go bankrupt because they’re not profitable, it’s just because they can’t manage their cash. For us it’s great to get more customers on the Taulia platform because it’s very user friendly and we can manage our cash in the best way possible.
The panel then took some questions from the audience about the onboarding process
Sandeep: Onboarding was simple. The bug aside, onboarding only took a day. We got an invitation from the system asking us to enter our information. Half of that was already in there because we had sent a PDF invoice to the customer who had input that into the Taulia system. We just had to sign up, give our bank account details and we were an approved vendor in the system within 24 hours.
Erik: We were onboarded before I started but whenever we add new entities it’s usually done within 24 hours. It’s very smooth and the team is very supportive. Only good stories!
Mihaela: It was very easy. We already had the contract so most of our information was already in the system. Even adding new vendors is very simple. It’s a very flexible solution.
During the Q&A segment the audience asked to hear more from Rocky about whether he considered any other SCF platform providers
Rocky: The short answer is no. Taulia was put on the table for us as the only solution available so we didn’t look any further. It was the only solution that integrated into our existing system (Massmod) locally. The flexibility and transparency of the system means that everything is trackable. This meant that we also had no audit issues at all.
The panel then shared some closing thoughts around what early payment with Taulia has meant for working capital, business continuity and eventually growth
Miheala: We have all had a great experience and strong partnership with Taulia. I would recommend that other organizations use their solutions if they’re looking for better management of their working capital and to improve the efficiency of their daily operations. In the current climate it is important to have the automation and digitisation in place that Taulia offers.