TReDS onboarding mandate: Why corporates must act now & What you must do for onboarding smoothly

In a significant move to bolster the financial health of MSMEs, the Ministry of MSME issued a notification mandating businesses with a turnover of ₹250 crore and above to onboard the Trade Receivables Discounting System (TReDS) platform. This directive underscores the government’s commitment to enhancing MSME liquidity and streamlining the payment cycle.

What is TReDS?

TReDS is an electronic platform that facilitates the discounting of trade receivables. It connects MSMEs with financial institutions, enabling them to sell their unpaid invoices at a discount and receive immediate funds. This mechanism significantly reduces the payment cycle, freeing up working capital for MSMEs and fostering their growth and development.

Also Read: The Clock is Ticking: Why Corporates Must Register on TReDS before 31st March 2025

Why is TReDS important?

• Faster payments – Ensures that MSMEs receive timely payments for their goods and services.

• Improved cash flow – Allows MSMEs to access funds upfront, invest in growth, and manage operational expenses effectively.

• Reduced financial risk – Mitigates the risk of delayed payments, preventing financial distress.

• Enhanced transparency – Provides a fair and regulated environment for invoice discounting.

MSME Mandate: Why is it important?

The government notification mandates that all companies registered under the Companies Act, 2013, with a turnover exceeding ₹250 crore must onboard the TReDS platform. This expansion of the TReDS mandate is a crucial step towards creating a more inclusive and efficient financial ecosystem for MSMEs.

Key benefits for corporates

• Improved supplier relationships – Strengthens trust and collaboration with MSME suppliers through timely payments.

• Enhanced corporate images – Showcases a commitment to supporting MSMEs and financial inclusion.

• Regulatory compliance – Helps avoid potential penalties and legal complications.

• Economic contribution – Facilitates faster payments to MSMEs, driving overall economic growth and job creation.

Why M1xchange is the best platform for TReDS onboarding

As India’s leading RBI-licensed TReDS exchange, M1xchange offers a seamless and efficient onboarding experience. Here’s why corporates should choose M1xchange:

• Proven track record – Trusted by leading corporates and MSMEs for invoice discounting.

• Quick and Hassle-free process – Registration can be completed in just 30 minutes through 4 easy steps.

• Robust digital infrastructure – Ensures smooth, paperless transactions.

• Wide network of Financiers – Access to multiple financial institutions for competitive invoice discounting.

• Dedicated support – Personalised guidance from M1xchange experts throughout the onboarding journey.

5 Must-Do things for TReDS onboarding

To ensure a seamless onboarding experience, corporates must follow these key steps:

1. Fill out the Buyer Onboarding form promptly – Initiate the process early to avoid last-minute delays.

2. Keep your KYC/KYB Documentation and NACH Filing ready – Ensure all required documents are in place for swift verification.

3. Complete and sign the Master Service Agreement (MSA) quickly – This is a crucial step to gain access to TReDS services.

4. Keep in touch with your onboarding contact person from M1xchange – Regular communication helps streamline the process and address any queries promptly.

5. M1xchange provides expert guidance at every step, ensuring a smooth transition onto the platform.

Act before the Deadline

With the 31st March 2025 deadline approaching, corporates must prioritise TReDS onboarding to stay compliant and unlock the benefits of invoice discounting.

Onboarding with M1xchange not only ensures regulatory compliance but also enhances working capital efficiency and strengthens corporate supply chains. By taking proactive steps today, businesses can embrace a smarter way to manage cash flow while contributing to MSME growth and economic development.

Start your TReDS onboarding journey with M1xchange today!