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 the overall cost involved in collections and reconciliation.

The Background

Stanley Black & Decker (SBD) is the world's largest Tools and Storage company, the world's second-largest Commercial Electronic Security company, and a world-leading provider of Engineered Fastening Systems. The product range includes hand tools, drills, hammer drills, angle grinders etc.

Global PayEX's solutions currently provide support to SBD's 650+ dealer/distributor network.

The Numbers

0Million

Euros unlocked

0Day

Reduction in Daily Sales Outstanding (DSO)

0%+

Straight Through Reconciliation (STR) - No Manual Intervention

The Numbers

0%

Improvement in the Cash Conversion Cycle

0USD 1.1

Million in Working Capital Unlocked

The Challenge

The finance and sales teams invested significant manual efforts and time in tedous tasks associated with accounts receivable management.

01 Invoice Processing and Sales Team Productivity

Invoices were printed and sent through a transporter, which caused delays 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% of their productivity in these tasks.

02 Financial Leaks due to Cash Discount Policy

The Cash Discount (CD) policies were slab-based; however, with checks being collected, the check realization dates would move into subsequent slabs. There were frequent disputes with dealers on the CD slabs and invoice dates. Out of goodwill, SBD gave away higher CDs, thus leading to significant financial leaks.

03 Manual Reconciliation

Multiple invoices were clubbed and paid, resulting in constant follow-ups with distributors for payment breakups. The F&A team needed additional workforce to avoid delays in resetting the credit limit. Although the banker provided virtual account numbers, linking payments with invoices and offset CNs was difficult.

04 Payment Delays

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

05 Partial Payment Reconciliation

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's Electronic Invoice Presentment and Payment (EIPP) solution, FreePay.

01 EIPP Solution Integration with SBD’s ERP

FreePay ensured that the outstanding invoices and credit debit notes were automatically picked up and presented instantly once generated. It resulted in the distributor getting an actionable invoice on the same date of invoice generation.

02 Mapping of Early Payment Discount Structure

FreePay helped to apply the correct discount structure once the distributor initiated invoice payment. The disputes on cash discount and discount slab leaks were eliminated.

03 Partial Payments Enabled Through FreePay

Dealers could make partial payments using FreePay, and the reasons for deductions were mandatorily captured for approval and audits.

04 Active SMS Dunning and In-App Notification

FreePay helped the dealer understand the downsides of late payments and penalties and the benefits of early payments. It also gave dealers the option to schedule payments as per their cash flows.

05 Reduction in Manual Intervention

The In-App payments handling, and the EIPP-ERP integration ensured the transactions were reconciled without manual intervention.

06 Live MIS Across Business Functions

The live dashboard was provided to finance and business teams to view the outstanding payments made by their respective dealers in real-time.

The Results

90% of SBD's 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's sales 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 the overall cost involved in collections and reconciliation.

The Background

Stanley Black & Decker (SBD) is the world's largest Tools and Storage company, the world's second-largest Commercial Electronic Security company, and a world-leading provider of Engineered Fastening Systems. The product range includes hand tools, drills, hammer drills, angle grinders etc.

Global PayEX's solutions currently provide support to SBD's 650+ dealer/distributor network.

The Numbers

The Numbers

The Challenge

The finance and sales teams invested significant manual efforts and time in tedous tasks associated with accounts receivable management.

01

Invoice Processing and Sales Team Productivity​

Invoices were printed and sent through a transporter, which caused delays 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% of their productivity in these tasks.​

02

Financial Leaks due to Cash Discount Policy

03

Manual Reconciliation​

04

Payment Delays​

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

05

Partial Payment Reconciliation

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's Electronic Invoice Presentment and Payment (EIPP) solution, FreePay.

01

EIPP Solution Integration with SBD’s ERP

FreePay ensured that the outstanding invoices and credit debit notes were automatically picked up and presented instantly once generated. It resulted in the distributor getting an actionable invoice on the same date of invoice generation.

02

Mapping of Early Payment Discount Structure

FreePay helped to apply the correct discount structure once the distributor initiated invoice payment. The disputes on cash discount and discount slab leaks were eliminated.

03

Partial Payments Enabled Through FreePay

Dealers could make partial payments using FreePay, and the reasons for deductions were mandatorily captured for approval and audits.

04

Active SMS Dunning and In-App Notification

FreePay helped the dealer understand the downsides of late payments and penalties and the benefits of early payments. It also gave dealers the option to schedule payments as per their cash flows.

05

Reduction in Manual Intervention

The In-App payments handling, and the EIPP-ERP integration ensured the transactions were reconciled without manual intervention.

06

Live MIS Across Business Functions

The live dashboard was provided to finance and business teams to view the outstanding payments made by their respective dealers in real-time.

The Results

The SBD's sales 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 delays 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% of their productivity in these tasks.

Manual Reconciliation

Payment Delays

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