Taulia has added an artificial intelligence (AI) capability to its working capital platform to help buyers better assess supplier behaviour and risk.

The fast-growing US-based working capital solutions provider marks its 10th anniversary this year. Its buyer-led supply chain platform, on which businesses can onboard their suppliers and manage their early payment programmes.

Taulia’s recently-released 2018 report showed that the network accelerated $24 billion in early payments last year, doubling from $12 billion in 2017, and expanded by more than one million to over 5.2 million connections globally. 

Companies using the network can choose their own method of funding, opting either for self-funded early payments through dynamic discounting or via supply chain finance (SCF) provided by a third-party lender.

Supplier behaviour analysed

Announcing the new version of its platform, Taulia said companies now have the power of AI at their fingertips with the next-level enhancement.

The platform taps into aggregated data on supplier behaviour, such as the historic timing of payments and the annual percentage rate (APR) accepted by suppliers when taking early payment, plus other factors including seasonality. By overlaying this with external data sources, the platform informs and simplifies the decision-making process for businesses operating early payment programmes.

Suppliers using the platform to receive offers based on their historical behaviour, including – but not limited to – the timing of early payments taken, the APR they are willing to accept and any fluctuations in their financial position.

“Suppliers therefore receive timely offers at the best rate available, adding strength and confidence to the buyer-supplier relationship,” the company commented. “Already, buyers have noted a threefold improvement in their early payment efficiency, meaning that more suppliers are making use of the available early payment offers.”

Identifying action points

In an interview with Global Trade Review (GTR), Vincent Beerman, Taulia’s senior director of product, said that the solution collects data from “myriad sources” including S&P Capital IQ, which provides information about a company’s financial standing, credit rating and cash conversion cycle metrics, as well as Data.com, Synthio and LinkedIn.

Buyers are able to utilise this data to make a more precise assessment of supplier risk and make early payment offers based on the information provided.

“The increasing availability and precision of prediction means our customers will be able to execute their working capital strategies with less risk and more reward,” Beerman says. “Taulia’s AI helps buyers understand if they are paying each supplier fairly and identify areas where they can unlock working capital by bringing their payment terms in line with industry and/or network averages.

“This entails some regressions and other machine learning tools to perform analysis and interpolation across millions of buyer-supplier relationships every day.”

The solution analyses each invoice to determine why an early payment was or was not selected, helping buyers understand how to drive and adjust their programmes.

“We group suppliers so that buyers can quickly see which suppliers require action,” Beerman told GTR. “That may be as simple as inviting a new supplier, adjusting the offered annual percentage rate or approving a supplier’s invoices more quickly.”

In addition, buyers can forecast their accounts payables cash outflows based on approved invoices as well as predictions around invoices that are yet to be approved and purchase orders that are expected to turn into invoices.