Case studies Automotive Component Manufacturer

CashFlo x A Leading Automotive Manufacturer: Powering Financial Transparency and Efficiency for an Automotive Company

INDUSTRY

Automotive

PRODUCTS USED

Vendor Financing

KEY SUCCESS METRIC

Increased vendor credit periods by 80%

TURNOVER

~INR 2,200 Cr

Objective

A leading automotive component manufacturer encountered several challenges in its existing cash discounting program. Vendors, though keen on early payments, were reluctant to agree to extended credit periods. Disputes over discounting rates and apprehensions about passing additional costs onto future prices further complicated the situation. With a substantial spend base of over Rs. 6,000 Crores and a vast network of more than 2,000 active vendors, negotiations on credit periods were time-consuming. The primary concern revolved around the genuine risk of vendors increasing prices over time to compensate for the additional interest cost.

Solution Provided

CashFlo seamlessly integrated with the TREDs program, providing the automotive component manufacturer access to cost-effective working finance. The implementation of a Dynamic Cash Discount program was a game-changer. This allowed vendors to autonomously determine optimal discounting rates, fostering a genuine win-win situation. CashFlo identified vendors' capital needs, prioritized urgent cases, and introduced a comprehensive end-to-end automated process. This ranged from pinpointing capital needs to making early payments, ensuring banks were paid at a later date automatically, and concluding with automated accounting and reconciliation. This holistic solution not only increased credit periods by an impressive 80% without extensive negotiation efforts but also brought about substantial efficiency gains in the financial operations of the automotive component manufacturer.

Our experience with CashFlo has been nothing short of remarkable. They seamlessly integrated with our existing processes, providing an innovative solution that not only increased our credit periods significantly but also brought unparalleled efficiency to our financial operations. The vendor delight, achieved without any negotiation efforts, speaks volumes about the success of this collaboration.