€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

0Million

Euros unlocked

0Day

Reduction in Days Sales Outstanding (DSO)

0%+

Straight Through Reconciliation (STR) - No Manual Intervention

The Numbers

0Days

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 Bridgestone's productivity and working capital efficiency.

01 Invoice Processing and Sales Team Productivity

Invoices were printed & 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 loss of 25% of the productive time of the sales team.

02 Payment Reconciliation Challenges across LOBs (lines of business)

Passenger & truck tire division payments were not allowed to be clubbed together, nor were cross-utilization 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 & make SAP accounting entries.

03 Partial Payment Request

Partial payments also led to delays in reconciliation as the time taken to figure out the reason for the partial payment often led to dealers’ 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

Bridgestone chose Global PayEX's EIPP solution, FreePay, to automate the cash reconciliation & collections process and the Salesman app to improve sales productivity.

01 Integrated EIPP Solution with Payment Associated Rules

Global PayEX's team 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 roll out 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. This integration also helps in posting the entries as soon as payment is received and reconciled against open items. It gives Bridgestone an accurate picture of their AR and cash flows at any given time during the day.

03 Active Dunning and In-App Notification

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

04 Multiple Lines of Business

FreePay ensures that the mixing of payment does not happen across LoBs (lines of business) and provides 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's Finance & Business teams can 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, achieve 98%+ straight-through reconciliation (STR), improve their DSO by 6 days, and reduce non-electronic payment modes like checks.

As a result of automating the collection and reconciliation process, Global PayEX helped Bridgestone channel its sales team to focus purely on sales and maintain an excellent dealer relationship.

The real-time reconciliation has helped Bridgestone to release distributor credit limits instantly. Global 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