In Accounts Payable and Procurement departments, generating millions in early payment discounts is possible--but it isn't easy. PayStream's 2014 AP & Working Capital report uncovered the latest research from large corporations who have already implemented eInvoicing and Dynamic Discounting, or are interested in implementing in the next 6 months. In this webinar, you'll learn the top metrics on: 1. Why companies are missing discount opportunities 2. Top concerns with dynamic discounting 3. Companies' main benefits of ePayments

1. HOW TO MAXIMIZE
DISCOUNT CAPTURE
Based on findings from the
AP & Working Capital Increasing Revenues from Early Payments

2. Meet Your Experts
HENRY IJAMS
Managing Editor
PayStream Advisors
JOE HYLAND
Chief Marketing Officer
Taulia

3. 1 2 3
CURRENT STATE
OF PAYABLES
FINDINGS FROM
THE REPORT
4
WHAT DOES
“PERFECT” LOOK
LIKE?
Q & A
Today’s Agenda

4. 1. CURRENT STATE OF PAYABLES

5. The Situation
LARGE CORPORATES
are holding record amounts
of cash generating low
returns
SMALL BUSINESSES
are in need of cash and
have little to no access to
capital – the #1 challenge
for small businesses
TRADITIONAL SUPPLY CHAIN
connectivity creates delays in
supplier payment

6. Excess cash is
earning a record
LOW RETURNS

7. Buyer Excess Cash
U.S. Non-Financial Companies’ Cash & Liquid Assets
Low Return on Cash
U.S. Interest Rate – 10-Year Treasury Rate
($ in tn)
10%
8%
6%
4%
2%
0%
1990
1995
2000
2005
2010
$2.0
$1.5
$1.0
$0.5
$0.0
1990
1995
2000
2005
2010

8. Suppliers face a
FINANCING GAP
and predatory costs of
CAPITAL

9. Suppliers have limited access to financing.
Traditional supplier finance only
serves the largest suppliers

10. Suppliers have limited access to financing.
Traditional supplier finance only
serves the largest suppliers
Banks continue to enforce strict
lending requirements

11. Suppliers have limited access to financing.
Traditional supplier finance only
serves the largest suppliers
Banks continue to enforce strict
lending requirements
“Long-tail” suppliers limited to
factoring, p-cards and other
expensive forms of finance

12. Lack of connectivity
DELAYS
payments

13. 1 2
Inefficient buyer/supplier
connections lead to no visibility into
invoice process
Average Time
to Approve a
Valid Invoice
55+
DAYS
3
Average U.S.
Payment
Terms
10 DAYS

14. And banks benefit from this
INEFFICIENCY

15. BUYER
Approves Invoice
on Day 5
Invoice-Net 60
1

16. BUYER
Approves Invoice
on Day 5
Invoice-Net 60
BANK
Buyer Earns
0.75% APR until
Due Date
1
2

17. SUPPLIER
Invoices
Customer
BUYER
Approves Invoice
on Day 5
Invoice-Net 60
BANK
Buyer Earns
0.75% APR until
Due Date
Suppliers
Borrow at 20+%
APR
1
2
3

18. Suppliers could check the status of their
invoices online 24/7?
Suppliers could incentivize early payments?
You can address your suppliers’ needs for
early payment?
You keep all the returns that would have
normally gone to the bank?
There is a way for you to pay your suppliers
less and have them thank you?
!"# $%…

19. !" #$%&q'(%") W(* +f D,-+'$%&$.:
Pay your invoice before day 10 or miss out on a discount.
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
2% 10
Net 30
0 10 Days 20 Days 30 Days

20. The New, Advanced Way:
DYNAMIC DISCOUNTING

21. C(p%'r" ( ),-+'$% "v"$ (/"r 10 )(*0!
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
$
$
0 10 Days 20 Days 30 Days

22. 0 DAYS
invoice
U0" p(*(b12 3 ($ +pp+r%'$&%* f+r r"v"$'".
AVERAGE PAYMENT TERMS (DAYS)
10-15 DAYS
approval
60 DAYS
due date
OPPORTUNITY
Anheuser-Busch
Hertz
Apple
Industry Average
120 DAYS
60 DAYS
45 DAYS
56 DAYS

23. G"$"r(%" r"v"$'" w&%4 %4" w&$-w&$ 0+1'%&+$.
Buyers save money and improve
return on cash by paying
suppliers early
Suppliers access less expensive
financing alternatives by
accepting time-variable
Dynamic Discounts

24. 2. FINDINGS FROM THE REPORT

25. What
Paystream Advisors AP & Working
Capital Survey
When
Q1 2014
Who
More than 300 AP, treasury, and
procurement professionals

26. | Company Size
26.2%
11.1%
9.5%
7.1%
Job Title |
15.1%
5.6%
10.3%
15.1% Under $50M
$50M-$100M
$100-$250M
$250-$500M
$500M-$1B
$1B-$2.5B
$2.5B-$5B
Over $5B
Survey covered businesses of all sizes
49%
13%
13%
12%
10%
10%
8%
8%
7%
AP Manager
AP Clerk
VP Finance
Procurement
AP Director
Controller
CFO/President/Chairman
Treasurer
Other
Respondents were mostly
in AP, Finance and
Procurement

27. Dynamic Discounting Adoption
&'()#$(* $+ ,-$.b$*/ "# 63% "**0"- /1(2#3 1"#4
15%
24%
3% 5% 8%
33%
82%
71%
59%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2012 2014 2014
Current Using
Implementing in
next 6 months
Not Using

28. Top Reasons for Missed Discounts
I*4ffi,$4*,$4+ $* )"6"b-4+ ,(.4 "# " ,7#!
15%
10%
26%
7%
7%
35%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Decentralized Invoice Receipt
Lost Invoices
Lengthy Approval Cycles
Large Number of Exceptions
Missing Information on Invoices
Manual Routing of Invoices

29. Dynamic Discounting solutions ease the
pain of missing early payment discounts
through centralizing processes, handling
exceptions, and streamlining the invoice
delivery and approval process.

30. Primary Buyer Dynamic Discounting Concerns
O1/"*$8"#$(*+ b4-$494 +0))-$41+ 2$-- 14+$+# D6*".$, D$+,(0*#$*/
26%
15%
27%
7%
25%
30%
25%
20%
15%
10%
5%
0%
Internal
Resistance
Security
Concerns
Supplier
Resistance
Banking Difficulty Integration
Difficulty

31. Top Reasons For Using ePayments
:0641+ "14 %(,0+4' (* ,7# "*' ,6,-4 #$.4
29%
25%
45%
30%
20%
49%
80%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Lower processing costs
Reduction in P2P cycle times
Reduction in fraudulent/lost checks
Increased vendor satisfaction
Increase in on-time payments
Increased ability to capture early payment
discounts
Reduction in duplicate payments
4P"6.4*#+ ",# "+
"* 4*"b-41 %(1
D6*".$,
D$+,(0*#$*/

32. When mov ing towards dynami c
discounting, setting goals is a critical
ingredient. PayStream has developed the
Perfect Payment Index to help in this
process.

33. Perfect Payment Index (PPI)
PPI 0%r&v2 %+ b(1($-" p(*5"$% "ffi-&"$-* & w+r7&$. -(p&%(1 $"")0
% on time
Ÿ
% paid
Ÿ % of discount potential
electronically captured
Company
Payment Discounts / Incentives 1 2 3 4 Average
% Paid on Time (< 60 Days) 92% 92% 93% 91% 92%
% Paid Electronically (ACH or Card) 55% 52% 39% 68% 53%
% of Potential Discounts Captured 32% 76% 26% 74% 45%
Perfect Payment Index 16.2% 36.4% 9.4% 45.8% 27.0%

34. 3. WHAT DOES “PERFECT”
LOOK LIKE?

35. Pacific Gas & Electric
PG&E is one of the largest
combination natural gas and
electric utilities in the United
States. Based in San Francisco,
the company has approximately
24,000 employees who provide
the transmission and delivery of
energy.
Incorporated in 1905
Over 15 Million Customers
Service area covers 70,000 sq.
miles in North. and Central CA
2013 Revenues of $15.6 Billion

36. 95K
eInvoices Payment Errors
178K
226K
312K
403K
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2002 2005 2008 2011 2014
0.01200%
0.00500%
0.00400%
0.00008%
0.014%
0.012%
0.010%
0.008%
0.006%
0.004%
0.002%
0.000% 0.00008%
2002 2005 2008 2011 2013

37. 72%
On Time Payments Discount Efficiency
78% 81%
94% 97%
120%
100%
80%
60%
40%
20%
0%
2002 2005 2008 2011 2014
73%
87% 90%
95% 95%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2002 2005 2008 2011 2014

38. Early Payment Discount Capture
Dynamic Discounting
was Implemented
1M 2M 4M
32M
46M
43M 42M
50,000,000
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
2002 2005 2008 2011 2012 2013 2014

39. Questions?