To increase electronic payments, reduce DSOs and reconciliation efforts.
An American Multinational tools manufacturing company moved into freepay leveraging consent-based NACH and fund transfer through NEFT/RTGS into designated virtual accounts.
The dealers would mostly issue cheques and PDCs for payment.
- Large financial leaks caused due to disputes with dealers as CDs were slab based but the realization dates would move to subsequent slabs.
- Payment made by NEFT and RTGS was a challenge as it was difficult to track the dealer.
- With no access to outstanding obligations, CNs, and debit amounts, dealers couldn’t track dues.
- Delay in cheque deposit originated that led to credit getting blocked.
- Partial Payment was a large challenge and finding the reason used up large bandwidth of all internal teams.
- The costly month-end process involved recon teams to scan bank statements and reconciling it into the ERP manually.
- Without access to a real-time view of incoming requests, no action was taken timely.
- Additional Freepay Discount of 0.5% introduced, encouraging dealers to move into Freepay and eliminate cheques.
- Dealers can view & pay from within Freepay where it automatically reconciled back at the ERP leading to short TAT for clearing credit lines.
- The live dashboard enabled live view of outstanding obligations and payments made by customers.
- Unique Virtual Accounts for each dealer allowed visibility of all NEFT/RTGS fund transfers with transparency.
- Freepay managed the CD slabs which enabled efficient control without any “goodwill leaks”.
- Freepay automated presentation of payments eliminating the manual efforts and errors.
Freepay enabled the collection by electronic to increase to 90% and reduced DSOs by 3 days – encouraging customers to move into electronic payments. Freepay cut short the reconciliation to same-day along with cost and collection activities reduced by 80%. SMS reminders and dunning features contributed to the faster collection.
Leveraging freepay not only improved the process of existing receivables but also set up a platform to expand and get potential customers with a comprehensive customer experience offered.
Electronic Payment Collection