Everything You Need to Know About Corporates TReDS Onboarding by March 31, 2025

All Central Public Sector Enterprises (CPSEs) and companies having an annual turnover of more than INR 250 crores are required by the Ministry of Micro, Small, and Medium Enterprises (MSME) to register on the Trade Receivables Discounting System (TReDS) platform by March 31, 2025.

By making it simpler for Indian MSMEs and businesses to reduce their trade receivables, the TReDS platform was developed to help them improve their cash flow. This strategy may help businesses get working capital more efficiently and openly, thereby enhancing their financial stability. The sum that clients owe a company for products or services delivered but not yet paid for is referred to in this context as trade receivable. In this blog, everything to know about corporate TReDS onboarding by March 31, 2025.

First, the benefits of TReDS will be learnt:

• Automation and Transparency
  Since the entire process is carried out electronically, human interaction is not required; hence, there is no chance of any mistakes.
• An Easy and Paperless Process
  For MSME suppliers, the process is made simpler by TReDS’s significant reduction in paperwork.
• Quicker Transactions and Quicker Turnaround Times for Financing
  Compared to conventional factoring agreements, TReDS enables quicker bill approval and payment for trade receivables.
• How Competitive Prices Are Determined
  As the entire process is managed by auction, MSME suppliers may be sure they will get the greatest price for their bills.
• Shortfalls in Payments
  There is no need to pursue payment because MSME suppliers are paid on time once their invoices are accepted.
• An Effective Working Capital
  TReDS may increase MSME suppliers’ liquidity since it removes the need for them to wait until the invoice’s due date to be paid.
• Numerous Funding Choices
  TReDS provides MSMEs with additional financing options, such as supply chain finance, in addition to conventional bank loans and advance payments.

These benefits demonstrate the potential benefits of this platform for businesses.

Now, steps to enroll on the TReDS platform will be discussed here:

Step 1: Understanding How Does TReDS Operate?

• Invoice Uploading: Sellers, many of whom are MSMEs, upload their invoices to the TReDS platform.
• Verification of Invoices: The platform verifies that the invoices are valid and qualified.
• Invoice Discounting: When a factoring company buys these suppliers’ invoices at a reduced price, the sellers get immediate cash.
• Money Collection: The factoring company receives the buyers’ money when the invoice is due.

Step 2: Factors to Consider Before Choosing

• Valid Registration and Accreditation
  It is crucial to confirm whether the TReDS platform is approved by a TReDS Exchange and has an RBI registration. This type of accreditation and registration demonstrates its legitimacy. They also guarantee that the platforms run securely, adhere to strict regulations, and maintain excellent service standards.
• Fees and Charges
  Before selecting this platform, consider all fees and charges to avoid unanticipated costs. Unstated expenses, such as maintenance, withdrawal, or inactivity fees, may be associated with certain systems.
• Turnaround Time (TAT)
  Turnaround time, or TAT, must be considered while selecting this platform. This is because a faster TAT suggests that business transactions are completed faster. This will enable them to immediately take advantage of market possibilities. This is especially important in volatile markets where prices can change suddenly.
• Security 
  One of the most crucial factors to take into account when choosing a TReDS platform is security. This is due to the fact that there are several cyberthreats that might inflict significant financial harm. Therefore, by employing the greatest security methods available, a safe platform lowers these risks.
• Support for Clients
  By guaranteeing that customers’ problems are resolved quickly, dependable customer service reduces potential losses. Therefore, business owners should think about this issue before utilising this platform.

Prioritise these crucial elements while selecting a trustworthy TReDS platform.

Also Read: How to Complete TReDS Platform Onboarding Before 31st March 2025

MSMEs now understand the TReDS Onboarding Process 2025 after learning about all of them. Its time to discuss about one of the well-known TReDS platforms presently.

On November 24, 2015, the Reserve Bank of India (RBI) authorised three companies to create the Trade Receivable Discounting System (TReDS) platform. Mynd Solutions Pvt. Ltd. launched M1xchange, a TReDS platform, on April 7, 2017, adhering to the Payment and Settlement System (PSS) Act of 2007. M1xchange leverages a transparent bidding process and a diverse lender network to offer affordable cash flow loans to MSMEs. Renowned investors in M1xchange include Amazon, Mayfield, BEENXT, IndiaMART, and SIDBI Venture Capital Limited.

Conclusion

This blog provides a comprehensive overview of Trade Receivables Discounting System (TReDS) platforms, including their description and key benefits for MSMEs. Additionally, it has offered beneficial guidance on how to select the optimal TReDS platform for certain business needs.

The Reserve Bank of India (RBI) authorised the establishment of TReDS platforms for three companies in 2015. Mynd Solutions Pvt. Ltd. unveiled M1xchange, a platform that facilitates MSME financing through invoice discounting, in 2017. It offers competitive borrowing rates through an open bidding process with many lenders.