Credable has enabled client-funded early payment program for suppliers with additional options of pre-invoice stage funding.
Client is the largest food product manufacturer in India and deals with multiple logistics vendors. These suppliers receive payment within 10 days of invoice approval but experienced a lengthy pre-invoice period. CredAble structured a hybrid financing solution to finance suppliers at the pre-invoice stage through our Just-in-Time Financing Program and post-invoice stage through our Early Payment Program. The following entails a live case study with one of CredAble’s clients in the baked goods industry.
About the Client:
- Client owns a dominant share of the biscuit market in India and the world’s largest selling biscuit brand
- Vendors experience overall credit periods of 60-75 days from invoice date; However, post invoice approval, suppliers wait only 5-10 days for payment
- Client initially enabled early payment leveraging own capital to boost treasury yields
- A client-funded early payment program for suppliers designed to run at large scale for 5000+ supplier universe with minimal human intervention
- Funding enhances treasury income for client when supplier payments are accelerated
- Over the course of our engagement with the client’s logistics supplier community, CredAble noticed lengthy pre-invoice period experienced by Client’s logistics suppliers
- CredAble structured a pre-invoice stage financing option for suppliers to better match their receivables and payables cycles
- The program enabled funding to logistics suppliers at a pre-invoice stage, based on proof of delivery, mapped by Goods Acceptance Notes (GANs); CredAble finances 80% of the GAN value. GANs validated by the Corporate ensure future payment against the GANs
- The platform generates and distributes transaction level documentation digitally
- Cash-to-cash cycles for suppliers reduced from ~50-60 days to 3-4 days
- Corporate treasury yields for the client boosted from 6.5% p.a. to ~15% p.a.
- Average post-invoice acceleration available of 5-10 days; Payments have been accelerated for as little as 3 days
- 50% of suppliers onboarded for pre-invoice funding against Goods Acceptance Notes. With NBFC funding the client generated returns of 13-15% p.a.
CredAble understands supplier nuances especially the logistics suppliers. We can engage with vendors at scale thereby creating process efficiencies for the Enterprise client and vendors.
For more information on both our programs, or to learn more about CredAble, please visit https://www.credable.in/credable-home/credable-solutions/early-working-capital/