Working Capital Solutions Lend Resilience and Mitigate Risk for Businesses and Their Trading Partners

Seeking to instill resilience across their operations and those of their trading partners, businesses have turned increasingly to integrated digital networks for the 360-degree visibility and multi-tier collaboration made possible only by cloud-based applications. Yet visibility and collaboration are hardly the only advantages offered by business networks.

So is the availability of innovative working capital solutions and, through them, the ability to manage risk and finance operational contingencies.

Without sufficient liquidity, businesses can fall short on promises made to customers. How can organizations free up the — often substantial — funds trapped within transactions that have yet to clear? Now more than ever, this is critical for businesses as the result of bottlenecked supply chains, backed up shipping queues, idled factories, and quarantined workers. The answer lies in digital business networks, which lend organizations the flexibility they need not only to shore up their supply chains and logistics operations but their financial management processes as well.

That is why earlier this year SAP acquired a majority stake in Taulia, the leading provider of working capital management solutions. With the aim of strengthening access to liquidity and improving cash flows, the acquisition complements SAP Business Network — already spanning the interconnected operations of trading partners engaged in procurement, supply chain, logistics, and asset management — with financing solutions across payables, receivables, and inventory.

Over the next two years, SAP plans to integrate Taulia’s capabilities with those of SAP Business Network, while also maintaining the fintech platform as a standalone solution.

Through Taulia, businesses have access to a network of dozens of banks for innovative financing solutions that cushion core operations from the ill effects of supply chain fragmentation and capital market volatility. Access to liquidity helps companies to bolster continuity, meet debt obligations, and avoid interruptions to long-term capital investments. End-to-end visibility across trading partners, meanwhile, sharpens businesses’ forecasting capabilities, helping to reduce risk to interconnected operations.

Taulia can help to secure financing such that a supplier is paid ahead of schedule through a third-party financial institution before an invoice is due. Then, upon the due date, the buyer repays the amount to the financier — all through the Taulia cloud-based platform. Taulia also facilitates dynamic discounting to incentivize the early payment of invoices, benefiting both parties to a commercial transaction.

By connecting buyers and suppliers with financial partners in real time with full transparency, Taulia minimizes the friction that can delay payments, impair operations, and even create supply chain risk. At the same time, Taulia helps businesses to free up capital needed for investment and research and development. This holds true for businesses large and small alike, because Taulia’s technology allows their solution to scale to thousands or even tens of thousands of trading partners.

What’s more, Taulia’s integration with enterprise resource planning (ERP) solutions from SAP streamlines the provision of data that lending institutions require.

As our SAP Business Network and Taulia product teams proceed with developing a joint road map for our customers’ mutual success, we anticipate that millions of trading partners on SAP Business Network will gain access to competitive early-payment offers via Taulia’s accounts receivable financing.

Our solutions will help to make supply chains more resilient, more reliable, and more responsive in these uncertain times.

Paige Cox is senior vice president, chief product officer, and head of SAP Business Network at SAP.