€7 Million working capital unlocked in 9 months with FreePay

€7 Million Working Capital Unlocked in 9 months with FreePay

The Objective

To automate the manual collection & reconciliation process for Bridgestone’s 5000+ dealer network

The Background

Bridgestone Corporation is a Japanese multinational auto and truck parts manufacturer founded in 1931 in the city of Kurume, Fukuoka, Japan. As of 2021, Bridgestone is the largest manufacturer of tires in the world with 181 production facilities in 24 countries.

The Numbers

0 Million

Euros unlocked

0 Day

Reduction in Daily Sales Outstanding (DSO)

0 %+

Straight Through Reconciliation (STR) - No Manual Intervention

The Numbers

0 Days

Reduction in Daily Sales Outstanding (DSO)

0 %

Reduction in Reconciliation Time

The Challenge

The manual interventions in the collection & reconciliation process for its 5000+ dealer base brought down productivity and working capital efficiency in Bridgestone.

01 Invoice Processing and Sales Team Productivity

Invoices were printed & sent through the transporter. It was the responsibility of the sales team to follow up with the dealer regarding delays and pending invoice payments. This in turn results in a loss of 25% of productive time of the sales team.

02 Payment Reconciliation Challenges across LOB’s (lines of business)

Passenger & truck tyre division payments were not allowed to be clubbed together nor were cross utilisation of credit notes allowed across LOBs. Still, the dealers used to make combined payments which posed a challenge for the AR team to segregate these payments & to make SAP accounting entries.

03 Partial Payment Request

Partial payments also led to delay in reconciliation as the time taken to figure out the reason for the partial payment often led to dealer’s dissatisfaction and their credit limits getting blocked.

04 Security Deposit Management

There were requests from dealers to convert part of their credit notes into a security deposit account which was a tedious manual process.

05 Lack of Account Visibility

Dealers lacked real-time visibility of their outstanding payments and credit notes which made them often call the sales team to help them with their account statements

Our Solution

EIPP Solution for Automatic Reconciliation & Collection process and Salesman app to improve sales productivity.

01 Integrated EIPP Solution with Payment Associated Rules

PayEX teams worked closely with Bridgestone’s banks to introduce unique virtual accounts for individual dealers to identify the source of payment and with Bridgestone’s sales teams to rollout the mobile and web app for dealers to select the “context” of the payment – invoices, credit & debit notes, deductions, etc.

02 Direct ERP Integration

FreePay is integrated directly with Bridgestone’s ERP (SAP) to fetch and present the invoice and credit notes to the dealers in real-time. The integration also helps in posting the entries as soon as payment is received and reconciled against open items. This gives Bridgestone a true picture of their AR and cash flows at any given time during the day.

03 Active Dunning and in-App Notification

The active dunning & in-app notification in FreePay notify dealers of late payments, penalties and also benefits of early payment cash discounts, with an option to schedule payment as per dealer cashflows.

04 Multiple Line of Businesses

FreePay ensures that the mixing of payment does not happen across LoB’s (line of business) and also provide a user-friendly interface that segregates the invoices across divisions/ LOBs to dealers. The postings are directly made by FreePay into SAP and are marked separately across LOB.

05 Adjustment of Credit Note as Security Deposit Payment

FreePay allows dealers to adjust their credit notes (fully/partially) not only against invoices but also as security deposit payments.

06 Live Dashboard Accessibility

Bridgestone Finance & Business team are given access to view the real-time update of payment records & status of payment of their respective dealers through the FreePay Dashboard.

The Results

Bridgestone was able to unlock 7 Million Euros in 9 months, accelerate their reconciliation by 2 times, ensured 98%+ straight through reconciliation (STR), to improve their DSO’s by 6 days, and to reduce non-electronic payment modes like Cheques.

As a result of automating the collection and reconciliation process, PayEX has helped Bridgestone to channelize their sales team to purely focus on sales and in maintaining an excellent dealer relationship.

The real-time reconciliation has helped Bridgestone to release distributor credit limits instantly. PayEX has helped Bridgestone with a platform that enables them to have accurate visibility of 99% of the working capital

3M India has successfully deployed Global PayEX’s FreePay solution to improve the efficiency in our collection and account receivable management. FreePay digitized our invoice presentment, automated payment processing and took care of our end-to-end customer account reconciliation. Our dealers have appreciated the solution for its completeness, ease of use and transparency in doing business.

Ranjan Choudhury , Credit Risk Manager - Asia Global Credit Risk Management COE

, Treasury 3M – India