Unlocked $1.1 million in working capital through quicker cash conversion with FreePay

The Objective

To reduce DSO, increase the productivity of the Sales team as well as reduce their overall cost involved in collections and reconciliation.

The Background

Stanley Black & Decker is the world's leading manufacturer of Tools and Storage products meant for woodworking, metalworking, concrete & other speciality applications. The product range includes Hand Tools, Drills, Hammer Drills, Angle Grinders etc.

SBD worldwide is No.1 in Tools and Storage, No.2 in Security Systems and a Global leader in engineered fastenings.

Our solution currently provides support to a 650+ dealer/distributor network.

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 %

Improvement in the Cash Conversion Cycle

0 USD 1.1

Million in Working Capital Unlocked

The Challenge

Significant Manual Efforts by the Finance & Sales Teams

01 Invoice Processing and Sales Team Productivity

Invoices were printed and sent through a transporter, which caused loss/delay in presenting invoices to dealers. The sales team would follow up with the dealers for pending or overdue invoice payments. It is estimated that the sales team lost 25% in productivity.

02 Cash Discount (CD) Policy Leaks

The CD policies were slab based, however, with cheques being collected the cheque realization dates would move into subsequent slabs. There were frequent disputes with dealers on the CD slabs and invoice paid date. Out of goodwill, SBD gave away higher CDs thus leading to large financial leaks.

03 Manual Reconciliation

Multiple invoices were clubbed and paid, resulting in constant follow-up with distributors for payment breakups. The F&A team needed additional manpower to avoid delays in resetting the credit limit. Although the banker had provided Virtual Account numbers, it was difficult to link payments with invoices and offset CNs.

04 Payment Delays

The dealers experienced difficulty in keeping track of due dates, thus missing them, leading to extended DSO’s.

05 Partial Payment Recon Challenges

Partial payments made by dealers were challenging to reconcile. A lot of time and resources were used to find the reasons for partial payments.

Our Solution

SBD chose Global PayEX to deploy their Electronic Invoice Presentment and Payment (EIPP) solution called FreePay.

01 EIPP solution integrated with SBD’s ERP

To ensure that the outstanding invoices, credit debit notes are automatically picked up and presented instantly once generated. This resulted in the distributor getting an actionable invoice on the same date of invoice generation

02 Mapped the early payment discount structure

To ensure that the correct discount structure is applied once the distributor initiates invoice payment. The disputes on cash discount and discount slab leaks were eliminated.

03 Partial payments enabled through FreePay

Dealers are now able to make partial payments and the reasons for deductions are mandatorily captured for approval and audits.

04 Active SMS dunning and in-App notification

The FreePay application helped the dealer understand the downsides to late payments and penalties as well as the benefits of early payments. FreePay gives dealers the option to schedule payments as per their cashflows.

05 Reduction in manual intervention

The in-App payments handling and the EIPP -ERP integration ensured that the transactions were reconciled back without any manual intervention.

06 Live MIS across Business Functions in SBD

The live dashboard was provided to Finance and Business teams so that they could view in real-time the outstanding payments made by their respective dealers.

The Results

90% of SBD collections have become electronic due to the outstanding electronic payment capabilities provided via FreePay such as NACH (ACH) and wire transfers. With a tightly controlled CD (cash discount) slab calculation and tracking mechanism, FreePay reduced leakages in CDs. FreePay also reduced disputes with dealers because of the transparency of credit notes. Earlier reconciliation used to take an average of two days, FreePay has reduced this to same-day reconciliation.

The SBD team can now focus on sales and maintaining distributor relationships. The distributors appreciate the transparency and seamlessness in the process. The real-time reconciliation has helped the company to release distributor limits instantly at the end of the month.

“The fintech-powered solution has fully digitized our workflows in India, alleviating our treasury team from traditional manual practices to better focus on core strategy planning, to further grow the business.”

Jessica Chan , Director of Treasury APAC ,

Stanley Black & Decker

Unlocked $1.1 million in working capital through quicker cash conversion with FreePay

The Objective

To reduce DSO, increase the productivity of the Sales team as well as reduce their overall cost involved in collections and reconciliation.

The Background

Stanley Black & Decker is the world's leading manufacturer of Tools and Storage products meant for woodworking, metalworking, concrete & other speciality applications. The product range includes Hand Tools, Drills, Hammer Drills, Angle Grinders etc.

SBD worldwide is No.1 in Tools and Storage, No.2 in Security Systems and a Global leader in engineered fastenings.

Our solution currently provides support to a 650+ dealer/distributor network.

The Numbers

The Numbers

The Challenge

Significant Manual Efforts by the Finance & Sales Teams

01

Invoice Processing and Sales Team Productivity​

Invoices were printed and sent through a transporter, which caused loss/delay in presenting invoices to dealers. The sales team would follow up with the dealers for pending or overdue invoice payments. It is estimated that the sales team lost 25% in productivity.​

02

Cash Discount (CD) Policy Leaks​

The CD policies were slab based, however, with cheques being collected the cheque realization dates would move into subsequent slabs. There were frequent disputes with dealers on the CD slabs and invoice paid date. Out of goodwill, SBD gave away higher CDs thus leading to large financial leaks.​

03

Manual Reconciliation​

04

Payment Delays​

The dealers experienced difficulty in keeping track of due dates, thus missing them, leading to extended DSO’s.​

05

Partial Payment Recon Challenges​

Partial payments made by dealers were challenging to reconcile. A lot of time and resources were used to find the reasons for partial payments.​

Our Solution

SBD chose Global PayEX to deploy their Electronic Invoice Presentment and Payment (EIPP) solution called FreePay.

01

EIPP solution integrated with SBD’s ERP​

To ensure that the outstanding invoices, credit debit notes are automatically picked up and presented instantly once generated. This resulted in the distributor getting an actionable invoice on the same date of invoice generation​

02

Mapped the early payment discount structure​

To ensure that the correct discount structure is applied once the distributor initiates invoice payment. The disputes on cash discount and discount slab leaks were eliminated.​

03

Partial payments enabled through FreePay​

Dealers are now able to make partial payments and the reasons for deductions are mandatorily captured for approval and audits.​

04

Active SMS dunning and in-App notification​

The FreePay application helped the dealer understand the downsides to late payments and penalties as well as the benefits of early payments. FreePay gives dealers the option to schedule payments as per their cashflows.​

05

Reduction in manual intervention​

The in-App payments handling and the EIPP -ERP integration ensured that the transactions were reconciled back without any manual intervention.​

06

Live MIS across Business Functions in SBD​

The live dashboard was provided to Finance and Business teams so that they could view in real-time the outstanding payments made by their respective dealers.​

The Results

The SBD team can now focus on sales and maintaining distributor relationships. The distributors appreciate the transparency and seamlessness in the process. The real-time reconciliation has helped the company to release distributor limits instantly at the end of the month.

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Invoice Processing and Sales Team Productivity

Invoices were printed and sent through a transporter, which caused loss/delay in presenting invoices to dealers. The sales team would follow up with the dealers for pending or overdue invoice payments. It is estimated that the sales team lost 25% in productivity.

Cash Discount (CD) Policy Leaks

The CD policies were slab based, however, with cheques being collected the cheque realization dates would move into subsequent slabs. There were frequent disputes with dealers on the CD slabs and invoice paid date. Out of goodwill, SBD gave away higher CDs thus leading to large financial leaks.

Manual Reconciliation

Payment Delays

The dealers experienced difficulty in keeping track of due dates, thus missing them, leading to extended DSO’s.

Partial Payment Recon Challenges

Partial payments made by dealers were challenging to reconcile. A lot of time and resources were used to find the reasons for partial payments.

EIPP solution integrated with SBD’s ERP

To ensure that the outstanding invoices, credit debit notes are automatically picked up and presented instantly once generated. This resulted in the distributor getting an actionable invoice on the same date of invoice generation

Mapped the early payment discount structure

To ensure that the correct discount structure is applied once the distributor initiates invoice payment. The disputes on cash discount and discount slab leaks were eliminated.

Partial payments enabled through FreePay

Dealers are now able to make partial payments and the reasons for deductions are mandatorily captured for approval and audits.

Active SMS dunning and in-App notification

The FreePay application helped the dealer understand the downsides to late payments and penalties as well as the benefits of early payments. FreePay gives dealers the option to schedule payments as per their cashflows.

Reduction in manual intervention

The in-App payments handling and the EIPP -ERP integration ensured that the transactions were reconciled back without any manual intervention.

Live MIS across Business Functions in SBD

The live dashboard was provided to Finance and Business teams so that they could view in real-time the outstanding payments made by their respective dealers.