To keep up with the ever-changing economic and financial trends, the Indian electrical industry is evolving constantly and at a rapid pace. However with the launch of M1 Exchange, managing cash flow is poised to get a lot easier for the Industry players.

The Problem

The electrical industry is a dynamic and fast evolving business with swift advancement in technology. It has also witnessed constantly changing economic and financial trends, and has a complex supply chain for manufacturing electrical products, which is cumbersome to manage. With increased competition and the resultant pressure on margins, focus on cost control has become paramount.

Most of the large projects are undertaken with cost guarantees to the end customers such as IT/ITES industries, hotels, public institutions and municipalities. The capital cost involved in the installation is to be recovered by the reduction in electricity cost over a predetermined period of time.

The Solution- M1 Exchange

The bill discounting process starts when the industry Supplier raise the invoice and the Buyer validates the same. This permits the financiers which are the Banks or the factoring companies to bid against the verified invoice. Once the supplier accepts the bid, the payment is processed in T+2 days. The process gives flexibility to the Suppliers to choose the best financier on financing cost.

Advantages of TReDS

The solution needs liquidity to negate anomalies in managing the supply chain finance which is facilitated by the robust platform of M1 Exchange. With the aid of M1 Exchange’s Invoice Discounting facility, electrical companies can get their invoice converted into factoring units and receive payments against them from financiers in three days. Here are some key benefits of invoice discounting and exchange services –

  1. Minimise cost
  2. It does not add borrowings or any additional liability on the balance sheet
  3. It does not use the cash flows of the buyer for the pre-payment
  4. Much faster turnaround than unconventional supply chain facilities by the banks
  5. Minimal paperwork
  6. Security of digital platform
  7. Minimise the duplicate payments and other operational risks
  8. Can be integrated with ERP systems and avoid manual processes

Why adopt this solution?

M1 Exchange is a digital platform with a goal to quickly convert invoices to cash. Invoice Discounting on M1 Exchange accelerates cash flow by enabling quick and standardised transactions.
Invoice discounting improves cash flow remarkably by reducing your company’s days sales outstanding (DSO). When rightly structured and implemented, supply chain financing will uniformly provide a ‘win-win’ solution to buyers, suppliers and financiers.
If you are in the lighting industry and in search of a boost of working capital for your business, reach out to us and learn how to achieve your business goals at a faster pace.

Inference

An inference can be drawn here is that invoice discounting is fast, flexible and hassle free with full maintenance of confidentiality. Working with an invoice discounting company will enable the flow of cash in business and will save it from approaching the financial institutes to borrow the capital in order to run the business. If you are in electrical industry or deal with the export of electric cables and are struggling with the insufficient working capital for your business, you can reach out to us to know how we can help you achieve your business goals.