Kyriba dd webinar ss
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© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 11
DYNAMIC DISCOUNTING AND ITS KEY BENEFITS
November 7th, 2013
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 2
Product Overview
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 3
• Payable Financing / Reverse Factoring - first in a suite of Supply Chain Finance modules
• Dynamic Discounting
• Leverages Payment Factory and Cash Visibility capabilities within Kyriba
Supply Chain Finance
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 4
Details of Dynamic Discounting
• Buyer offers dynamic payment terms to its suppliers• Should a supplier choose to be paid earlier than term,
buyer earns discount• Buyer sets and controls the discount rate that is
dynamically calculated for entire term of invoice• Opportunity for buyer to earn discounts on its entire
spend, not just pre-negotiated discount terms from a small percentage of suppliers
• Allows suppliers to control payment timing and manage their cash flows
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 5
Benefits – Dynamic DiscountingBuyer• A valuable tool for cash
optimization - alternative for investing short term excess liquidity
• Earn above market, risk free returns on annual spend by paying suppliers in advance
• Flexibility – enable or stop early payment options at any time
• Minimize counterparty risk from improved financial health through the supply chain
Supplier• In control of payment
receipt, can request payment at any point of invoice term, depending on working capital needs
• Alternate source of working capital finance
• Visibility of approved invoices and payments to better manage working capital needs
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 6
Functional Workflow - Dynamic Discounting�
Approved invoice
Purchase order
Product delivery
Invoice
Dynamic discount offer
Request for early payment
Early payment
Payment of non-discounted invoices at maturity
Supply chain finance platform
Buyer Supplier
Impact of Dynamic Discounting
© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 8
Neutral Negative
Solutions Impacting Working Capital in S2S Space
Solution
Payment Term Management
Early Pay DiscountingDynamic Discounting
Payable Financing
Notes: 1 Assumes monthly settlement cycle with issuing bank2 Assumes Buyer starts with all check payments
Positive
Impact on Buyer
Working Capital
EBIT Process Efficiency
Impact on Supplier
Working Capital
EBIT
e-Procurement
e-Invoicing
Strategic Sourcing and Procurement
PurchasingCards1
Optimal Purchasing Channels
Optimal Payment Channels2
Supply Chain Finance Tools
© 2012 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 9
SCF Tools’ Benefits for Companies with $1B in spend and 100K Invoices and Payments
Solution
Payment Term Management
Early Pay Discounting
Dynamic Discounting
Payable Financing
Financial Benefit to BuyerWorking Capital
ImpactCost Reduction
($M)
6 - 12 days DPO improvement -
2 - 3 days DPO degradation $1.2M
5 - 8 days DPO degradation $2.0M
12 - 20 days DPO improvement -
e-Procurement
e-Invoicing
Strategic Sourcing and Procurement
PurchasingCards
Other Purchasing Channels
Other Payment Channels
2 - 3 days DPOimprovement
$0.9M
Needs further evaluation
1 - 2 days DPO degradation$0.1M
- $0.6M
- $0.4M
- $2M
7 days DPO improvement $7M
Kyriba Supply Chain Finance Platform
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 11
• Multibank–Enables participation from multiple funding sources–Alleviates credit exposure issues, reduces counterparty
risk–Flexibility for buyer to choose banks per region
• Visibility–Centralized workflow: Buyer, Supplier, Bank–Provides real-time visibility to invoices approved for
payment by buyer, to suppliers and banks• Ease of Use
–Easy to work with multiple banks as well as with one bank –Encourages onboarding of suppliers
Kyriba SCF Platform
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 12
Integrates with Treasury• Cash forecasts to optimize working capital decision making• Payment of financed and non-financed invoices from one platformIntegrated SCF Solution• Administer a global Dynamic Discounting and Payable financing
solution, on one integrated platformScalable• Improve productivity so that program can expand (but team
doesn’t have to):• Bank connections• ERP Integration• Global Reach• Web-based
Kyriba SCF Platform
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 13
Financial Partners
Suppliers
Buyer
Import from ERPs
Export FinanceRequest
Forecast Creation
PaymentCreation
Access by all parties: • Buyers • Suppliers • Financial Partners
Integration with Treasury Workflow:• Cash Forecast• Payments
Kyriba SCF Platform
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 14
Additional Resources
Kyriba Trade Solutions fact sheet http://goo.gl/AbYm2f
Improving Working Capital infographic http://goo.gl/LTIY1c
SCF Payable and Receivable Solutions guide http://goo.gl/byNxPA
Treasury Management Systems and SCF white paper http://goo.gl/YceL3P
© 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 15
Contact Kyriba
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linkedin.com/company/kyriba-corporation
youtube.com/kyribacorp
slideshare.com/kyriba
kyriba.com/blog