BankingCorporate to Bank RelationshipsCase Study: Digitisation and Automation of end to end Vendor Bill Discounting

Case Study: Digitisation and Automation of end to end Vendor Bill Discounting

The task at hand focuses on digitization and automation of the end to end vendor bill discounting process, making it completely “real-time” & “paperless”

India’s Largest FMCG Conglomerate, Future Group, along with Bank of Baroda and enterprise treasury risk management (TRM) Provider, IBSFINtech have collaborated to disrupt the vendor bill discounting process.

For the first time in India, the organisations have come together to deliver seamless straight-through processing of the vendor bill discounting workflow from the corporate to the bank and vice-versa.

Vendor Bill Discounting: A daunting task

Future Group has major dealings with Bank of Baroda, amongst multiple other banks, and the company has used IBSFINtech’s Innovative Trade Finance product to manage their trade finance operations for the last three years. With vendor bill discounting becoming a daunting task for the Future Group’s Finance team, owing to the large amount of documentation and approval processes involved, Future Group took the initiative to digitise the whole process.

The bill discounting process became a cumbersome task for the Future Group Finance Team, with the generation of 1,200+ invoices from different lines of business (LoBs) leading to 2,500+ documents to be processed on an average on daily basis. The daily bill discounting amount would range from INR 5-10 Cr (700,000 to 1.4m USD). Manual uploading of these documents, internal approvals and the bank’s processes post-submission of the bill discounting application led to a delay of two to three days for funds to be released by the bank.

Post-digitisation, the end-to-end bill discounting process has become seamless, paperless and completely automated, reducing the process from two to three days to a few hours.

Real-time & paperless

IBSFINtech is facilitating this seamless and ‘paperless’ communication between the corporate’s ERP and Bank’s system in this whole digitization process, thereby empowering the corporate & the bank with fully automated, secure and real-time process for vendor bill discounting.

In this fully digitised process, Future Group users from different LoBs create the vendor bill discounting application in the IBSFINtech solution. The solution has been designed to ensure adherence to the required validations of the company and the bank to ensure valid data is uploaded every time. Any discrepancies or violations are alerted to the user at the time of upload, leading to fewer rejections by the bank. As the application is already according to the bank’s business rules, inbuilt in the IBSFINtech solution, the application is processed without any further delay. The users are notified at every step of the application process and duly prompted upon receipt of the funds. Moreover, the digital signature facility and the mobile application for real-time updates ensures timely response from all stakeholders.

Ultimately, the bill discounting process is completed in real-time, meaning funds are received within a few hours, as opposed to taking two to three days to clear.

Manual errors curbed

C P Toshniwal, Group CFO of Future Group shared: “We are managing more than 3000 Cr of PBD & LCs of Future Group on IBSFINtech’s Innovative Solution. By digitization of the Purchase Bill Discounting process, we have been able to process large volumes of invoices with same day receipt of funds from the Bank. The multi-level authorizations built into the solution ensures we curb manual errors. Moreover, the mobile application makes it very convenient and secure for me to approve the application almost instantly. I am glad to share that our typical time for each transaction has reduced from 2-3 days to only a few hours, post implementation.”

Chandra Mohan Grover, MD & CEO of IBSFINtech India, quotes “Our product has been designed and developed dynamically to fit into any ecosystem of corporates and interfacing with various other systems like enterprise ERP, dealing platforms and market data providers. Linking to banks over an API or through SFTP was not a challenging task for us, as we had to just customize the product to suit the way banks manage their APIs. We look forward to engage with Banks to digitize workflow for their other customers.”

Adopting real-time technology, and transforming real-time visibility into real-time liquidity management is getting significant for treasuries in Asia as fintech is forming dynamic partnerships to create finance solutions which eliminate inefficiencies for corporate treasurers.

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