How a DTH and entertainment major earned 15% returns through a custom Invoice Discounting Solution

The Challenge

One of India’s largest publicly listed television providers wanted to improve it’s EBITDA returns and help their vendors carry out bill discounting to get early payments.

They recognized that vendors were borrowing at high rates to address their working capital gap and this constituted a risk to the resilience of their supply chain. In their industry, supply chain disruptions can lead to immediate and material impact to revenue. 

The Client was familiar with direct cash discounting programs, but the challenges were multiple – they did not want to operate a bank-led program, but preferred to use their own treasury funds. Moreover, the Client had stringent GST and regulatory requirements which could not be compromised in any way.

The biggest concern, however, was that a direct cash discounting program would lead to vendors passing back the discount as a future price increase.

The Solution

CashFlo deployed its vendor bill discounting platform to reinforce the client’s supply chain.

Each vendor went through a self-service process to discover their ideal rate and access liquidity. Hence, the entire process of rate negotiation was eliminated. This simplified operations for the Client, and de-risked the process of future price increase pass-back.

The Client and CashFlo together had another challenge to overcome – Compliance Requirements. CashFlo went into the details of the Client’s existing process and customized the platform to match it exactly. Vendor payments were executed with GST details and exact accounting treatment as currently in place by the Client. All this was done without a significant impact on implementation time.

“CashFlo has truly worked with us as a partner in implementing their unique solution. We evaluated 4-5 players before finalizing on CashFlo and found their made-for-India solution to be most superior. Their execution on the ground is truly phenomenal and they were able to customize their offering significantly to suit our process and requirements.”

– Treasury Head, DTH Major

The Result

Due to Cashflo’s dynamic discounting platform and custom as well as flexible solution for  GST compliance, the Client readily adopted the process with minimal operational overhead and is now experiencing far better-than-expected coverage of the vendor base.

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