Hafele Achieved 74% Increase in Productivity with FreePay

The Objective

To automate the manual collection & reconciliation process for instant release of distributor credit limits and to free up the time of the Hafele commercial team.

The Background

Hafele is an international company that provides hardware, fitting systems and electronic access control systems around the world.

Hafele India is a wholly owned subsidiary of the Hafele Global network, and their products are available across the country, serving 700+ dealers/distributor networks spread across 29 states in India.

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 %

Productivity Increase

0 Day

Reduction in DSO

The Challenge

Hafele relied heavily on manual processes for their collection and reconciliation processes. These manual processes significantly brought down productivity and working capital efficiency.


Invoice Processing and Sales Team Productivity

Invoices were printed and sent through the transporter. The sales team was responsible for following up with the dealer regarding delays and pending invoice payments. It resulted in a 25% loss of productivity and time for the sales team.


Credit Notes and Advance Payment Collection​

Credit notes were sent via mail to dealers and required continuous follow-up from the dealer with the sales team to check for their validity. Dealers paying advance amounts posed a challenge for the AR team as they had to park these advances separately and later mark them against invoices.


Manual Reconciliation​

The finance team faced challenges during reconciliation as multiple invoices were clubbed & paid by dealers; hence, constant follow-up was needed to obtain payment breakups. Although banks provide virtual account numbers, finding the payment context was difficult.


Payment Delays​

Due to the difficulty involved in keeping track of payment due dates by the dealers, many of the payments were missed, which led to extended DSOs.

Our Solution

Hafele chose Global PayEX's EIPP Solution, FreePay for automating the reconciliation and collection process.


Real-Time View of Invoice​

Integrating the EIPP solution with Hafele’s ERP ensures that the outstanding invoices and credit/debit notes are automatically picked up once generated, resulting in the distributor getting an actionable invoice on the same date of invoice generation.


Early Payment Discount Function​

The early payment discount structure is mapped to ensure that the correct discount is applied once the customer initiates invoice payment​.


Advance Payment Function​

Collection of ad-hoc advances via FreePay helps in easy reconciliation. It streamlines the customer's payment experience.


Active Dunning and
In-App Notification

Active Dunning & In-App notification in FreePay notifies dealers about late payments, penalties, and benefits of early payment with an option to schedule payment as per dealer cash flows.


Automatic Reconciliation

The In-App payments handling and the EIPP-ERP integration ensures that the transactions are reconciled back without any manual intervention.

The Results

As a result of automating the collection and reconciliation process, Global PayEX has helped Hafele to channel the sales team to focus purely on sales and maintain an excellent dealer relationship. The real-time reconciliation has enabled Hafele to release distributor credit limits instantly, even at month’s end. With Global PayEX solutions, Hafele achieved a 74% increase in productivity, a 2-day reduction in DSO, and 13% cost savings.

“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

Bridgestone India’s digital collections went from 22% before Covid-19 to 80% in March 2021. They unlocked around 7.8M USD over a 9 month period by adopting FreePay. Bridgestone has now reduced its day sales outstanding (DSO) or the average time taken to get paid after invoicing by 6 days. Around 75% of Bridgestone India’s 4500 dealers are extensively using FreePay. Bridgestone has received great feedback from the dealers on the seamless experience of their payment process which is a good win-win for both parties.

According to chief financial officer (CFO) Jyotsna Sharma, Bridgestone India has now reduced its days sales outstanding (DSO) – or the average time taken to get paid after invoicing – by six days, unlocking €7 million in cash flow over an nine-month period.

“Our digital collections went from 22% before Covid-19 to 80% today,” said Sharma. “We are expecting further efficiencies in our working capital as we look towards onboarding all of our dealers onto the platform. We have received great feedback from them on the seamless experience of their payment process so it’s really a win-win for both parties.”

“Digitalization of our finance processes continues to be a key priority for us at Bridgestone India. We are delighted to see great progress with JP Morgan’s solution that has helped us overcome some of the longstanding challenges around manual processes that we face operating in this market while staying compliant with regulatory requirements,” added Sharma.

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