Taulia’s survey: a supplier’s best customer can be the worst to get paid from

New research by Taulia confirms that slow payments and ‘unearned discounts’ by large companies with access to some of the lowest rates in the global capital markets are shifting the financing burden onto smaller companies that pay dearly for capital, if it’s available at all.

The supplier survey offers rare insight into what companies are facing in keeping their best, and often biggest, customers happy. The survey included 1,639 suppliers with almost 62 percent of them small to mid-sized companies with less than $250 million in annual revenue. It’s rare that these supplier will speak publicly about these challenges.

Specifically, Taulia’s survey found that:

  • On average 47 percent of suppliers were paid late.
  • The late payments averaged 9.3 days, with 25 percent of respondents waiting more than 40 days to be paid, Taulia found.
  • 20% of suppliers had discounts taken, even after an early-payment-term date had passed, or what Taulia simply calls taking an “unearned discount.”
  • that suppliers have a strong desire to have the option to be paid early; regularly accept acceleration of all invoices, in exchange for a small discount; and some suppliers accept early payments in order to meet seasonal cash-flow needs.
  • Major companies are often deferring payments or taking unearned discounts to boost their bottom lines.

Taulia CEO Cedric Bru:
“We’re constantly looking to meet the needs of our clients, and a major part of helping achieve their goals comes from better understanding the small businesses that supply them. It’s clear that suppliers are still struggling from late payments. Early payments are a win-win for suppliers and corporations.”

Taulia’s platform enables its large corporate clients to pay suppliers early, taking advantage of early payment discounts. Taulia also has a huge pool of institutional investors eager to step in and pay those suppliers when the corporate buyer doesn’t want to part with cash early. For investors, the supplier financing arrangement is a very attractive short-term investment opportunity, with little credit risk.

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