Going Electronic 

Objective

Primarily, clients were in cheque collections and were struggling to reduce DSOs due to traditional cheque collection methods.

Introduction

An American Multinational tools manufacturing company Moved into Freepay leveraging consent-based NACH and fund transfer through NEFT/RTGS into designated virtual accounts. 

Challenge

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 as they are widespread across the country. 

 Large financial leaks caused due to disputes with dealers as CDs were slab based but the realization dates would move to subsequent slabs.

 Delay in cheque deposit originated that led to credit getting blocked. 

 Payment made by NEFT and RTGS was a challenge as it was difficult to track the dealer. 

 The costly month-end process involved recon teams to scan bank statements and reconciling it into the ERP manually. 

With no access to outstanding obligations, CNs, and debit amounts, dealers can’t track dues. 

 Without access to a real-time view of incoming requests, no action was taken timely.

 Partial Payment was a large challenge and finding the reason used up large bandwidth of all internal teams

Solution

To develop a solution that is addressable to most of the concerns, Global PayEx worked with the Finance & IT team of clients. Following solutions are offered to their challenges:

 Additional Freepay Discount of 0.5% introduced, encouraging dealers to move into Freepay and eliminate cheques. 

 Unique Virtual Accounts for each dealer allowed visibility of all NEFT/RTGS fund transfers with transparency. 

 Dealers can view & pay from within Freepay where it automatically reconciled back at the ERP leading to short TAT for clearing credit lines.

 Freepay managed the CD slabs which enabled efficient control without any “goodwill leaks”.

 The live dashboard enabled live view of  outstanding obligations and payments made by customers 

 Freepay automated presentation of payments eliminating the manual efforts and errors.

Conclusion

Freepay enabled the collection by 90% to electronic 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. 

Let's Automate Your Transactions, Shall We?