Building on our previous discussions, let's delve into how SAP and Taulia’s integrated solutions can further enhance business value through optimized working capital management, actionable insights, streamlined cash conversion cycles, and improved sustainability performance.
1. Access to Affordable Liquidity
Taulia solutions offer an innovative liquidity solution for organizations seeking financial stability and growth. Their leading-edge technology enables efficient management of working capital through flexible options, such as offering or accepting early payments, extending payment terms, and selling receivables. Taulia's platform expedites the onboarding of suppliers and buyers, yielding a user-friendly approach to meeting your working capital objectives and adapting to your evolving business needs.
2. Actionable Insights for Effective Management
Taulia solutions deliver vital actionable insights for companies. These insights allow organizations to benchmark, plan, deploy, and measure their working capital initiatives accurately. The tools offered by Taulia solutions facilitate the simulation of potential working capital impacts of various programs prior to implementation. This predictive capability enhances decision-making confidence by providing clear action items based on detailed analyses.
3. Comprehensive Cash Conversion Cycle Solutions
Taulia solutions provide a full solution for the Cash conversion cycle (CCC), which measures how long it takes for a company to convert its investments in inventory and other resources into cash flow from sales.
A shorter CCC is better, as it means the company is able to quickly turn its investments into cash, which can then be used for other purposes like paying off debts or investing in new projects. Taulia's solution helps customers influence their:
- Days Inventory Outstanding (DIO: how long it takes for a company to sell its entire inventory)
- Days Sales Outstanding (DSO: how long it takes for a company to collect payment for products or services it has sold) and
- Days Payable Outstanding (DPO: how long it takes a company to pay its suppliers for goods and services),
allowing them to plan, track, and continually refine their working capital goals.
4. Seamless Integration with SAP Solutions
As part of SAP, Taulia solutions are now fully integrated and extensively embedded within various SAP solutions. This deep-rooted integration enhances the user experience by incorporating features such as single sign-on, eliminating the necessity for multiple log-ins and additional training. Consequently, this simplifies user interactions and significantly enhances efficiency.
5. Driving Improvement in ESG Performance
As a leading innovator in promoting sustainable supply chains, Taulia solutions strengthen Environmental, Social, and Governance (ESG) performance. Amplify your business worth with SAP and Taulia's consolidated solutions for refined working capital management, insightful data analysis, and a fluid cash conversion cycle. These steps also boost your sustainability performance.
By adopting sustainable practices in your business, you're aligning with ESG goals while simultaneously influencing key financial markers, including the cash conversion cycle.
These 5 elements combined form a compelling and unique business case, of particular relevance to large organizations to embark on digital transformation projects.
Now, let's take a closer look at how this solution affects the cash conversion cycle and why it's so important.
The cash conversion cycle (CCC) shows how quickly a company gets back the money it uses to make and sell products, which is essential for growth and investments. It includes the time taken to sell stock (Days Inventory Outstanding/DIO), collect payments from its customers (Days Sales Outstanding/DSO), and pay suppliers (Days Payable Outstanding/DPO).
The CCC is calculated by adding DIO and DSO, then subtracting DPO. Lower values are better as they mean a faster return of funds. Taulia's solutions help businesses manage these metrics, save costs, and improve financial health.
The different solutions that Taulia offer allow customers to lever these key KPIs, improve the working capital position or deliver extra discounts, and reduce the cost of goods sold and hence improve the financial situation of businesses.
Another important and unique value driver is that Taulia offers solutions that can dynamically address the whole supply chain to speed up cash flow for big, medium, and small suppliers. These include Dynamic Discounting, Supply Chain Finance, and Virtual Cards.
- Taulia Dynamic Discounting allows for early payment to suppliers. It's funded by the buyer who benefits from low-risk returns and improved margins. As the invoice due date nears, the discount for early payment reduces. In essence, irrespective of the supplier's early payment acceptance timing, the buyer can optimize yield and reduce their cost of goods sold (COGS). This is possible if, for example, an invoice due in 30 days is settled on day 10, resulting in a discount for the buyer; a win-win for both parties.
- Taulia Supply Chain Finance facilitates early payments using third-party funding. After the buyer approves an invoice, the supplier can choose early payment through Taulia's Multifunder Platform, giving a slight discount to get paid earlier while the buyer pays the full amount to the funder at term.
- Taulia Virtual Cards allow buyers to interact with suppliers who may not be interested in Supply Chain Finance or Dynamic Discounting. Ideal for suppliers who deal in large quantities of low-cost transactions and accept card payments, these cards can be funded by the buyer or by a third-party funder. Suppliers are paid with controlled, single-use accounts, while the buyer keeps their cash for a specified payment cycle, like up to 30 days.
As you can see, the combination of these solutions allows for flexibility to cover all suppliers and cater to the distinct needs of the buyer.
Let's explore the key role that Taulia solutions play in enhancing sustainability through its "Sustainable Supplier Finance" program.
With Taulia's "Sustainable Supplier Finance", companies can run programs to encourage suppliers to focus on Environmental, Social, and Governance (ESG) practices. Suppliers get better financing rates if they progress in these areas. Companies can align their sustainability goals with their supply finance programs by incorporating the ESG ratings of their suppliers. This not only benefits the suppliers, but it also aids companies in promoting sustainability across their supply chain. Furthermore, suppliers can use their improved ESG ratings to attract other buyers, maximizing the program's benefits.
