Pharmaceutical Manufacturing Giant, GSK, Increased the Success Rate of ACH Debits to 65% Within the First Three Cycles

The Objective

To automate their accounts receivable within their dealer and distributor network through the ACH mechanism, allowing them to track upcoming payments and avail cash discounts for early payments.

The Background

GlaxoSmithKline Pharmaceuticals Ltd is an Indian subsidiary of GlaxoSmithKline plc, one of the world’s leading research-based pharmaceutical and healthcare companies. It is one of the oldest pharmaceutical companies in India. GSK Ltd has a wide network of dealers and distributors across the country, and they ventured into payment collection automation for their distribution partners within Vx, Rx divisions to improve working capital.

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 %

Success Rates in Weekly Debits

0 %

Reduction in Reconciliation Time

The Challenge

GSK depended on checks for their invoice payments, which included error-prone manual processes and unsuccessful check clearance, which posed a problem for releasing locked credit lines. They employed a team within finance to track end-to-end collections, but it was difficult to share payment-related information with dealers through regional CFAs. Concerns with their receivable reconciliation would bring down the efficiency of working capital.


Check Collection and In-Transit​

CFAs were responsible for collecting and maintaining check details along with the history of payments for GSK. Checks in transit would often pose a problem around credit limit releases.


Payment Failures Due to Check Bounce​

Check bounce would lead to immediate locks on credit limits until an alternate payment collection method was provided. There were delays in settling invoices on their ERP. GSK dealers and regional CFAs had to track payment history manually​.


Follow-Up and Reconciliation Errors

Regional CFAs would chase dealers for payments, and with tedious tasks associated with a check payment process, the GSK team considered reconciliation their primary challenge. Corrective measures included heavy manual intervention.


Dispute Resolution and Settlement Issues​

Multi-level escalation would hamper dealers' experience around GSK invoice payments. The resolution would involve different members from sales as well as finance to communicate with the dealer.

Our Solution

Global PayEX’s Electronic Invoice Presentment and Payment (EIPP) solution, FreePay, is deployed to automate and overcome the challenges of GSK associated with invoices, payments and, most importantly, reconciliation.


Technical Implementation​

FreePay replicated check payment mechanisms through ACH mandates, processed through GSK’s banks. SFTP integration allows the exchange of outstanding data and enables real-time payment updates for every dealer using the platform.


Automated Dunning

Automated dunning is enabled through SMS for upcoming invoice payments. Periodic reminders are sent to dealers, informing them about due dates and invoice amounts, allowing dealers to keep their bank accounts well-funded.


Early Payment Discount

Cash discounts are easily configured and prompted through FreePay, encouraging dealers to avail discounts through the platform. This intent-based feature enables GSK to collect payments faster from their dealers.


Invoice Deferment​

The payment deferment feature is enabled on FreePay for dealers who do not have sufficient funds to pay for the upcoming invoices. A multi-level authentication process through a dashboard allows the GSK team to approve deferment requests from dealers and reschedule the payment to a future date.


Payment History

FreePay allows GSK dealers to access historical payment information for all invoices paid through the platform. Details of cash discounts, as well as deferments, are available for the GSK team through a report downloaded from the actionable dashboard.

The Results

Global PayEX’s solution enabled GSK to streamline accounts receivable processes and increase the success rate of ACH debits to 65% within the first three cycles. They were also able to reduce the time taken for dispute resolution. Further, by integrating FreePay, GSK elevated its customer experience and set up a platform to expand and onboard other non-direct debit customers.

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

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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