Why Corporates with turnover 250cr + needs to be on TReDS by 31st March

In a decisive step towards fostering better liquidity and financial inclusion for MSMEs, the Ministry of MSME has mandated that corporates with a turnover of ₹250 crore and above must register on the TReDS platform by 31st March 2025. This directive highlights the government’s commitment to strengthening the MSME ecosystem while ensuring corporates maintain efficient vendor relationships. For businesses, timely compliance is not just about meeting regulatory obligations but also about embracing financial solutions that can optimise working capital, support suppliers, and drive growth.

Understanding the Mandate

The recent notification reduces the turnover threshold for mandatory onboarding on TReDS from ₹500 crore to ₹250 crore, widening the scope for MSMEs to access invoice discounting facilities seamlessly. The TReDS platform allows MSMEs to discount their unpaid invoices from larger buyers (corporates) at competitive interest rates through a transparent digital marketplace.

For corporates, this means the opportunity to provide early payments to suppliers without disrupting their own cash flows. With the 31st March deadline approaching, businesses must act promptly to leverage the benefits and avoid compliance risks.

Why Compliance is essential

• Mandatory regulatory requirement: The notification makes it obligatory for all companies with a turnover of ₹250 crore and above to register on a TReDS platform. Non-compliance could result in regulatory scrutiny, penalties, and reputational risks.

• Strengthened supply chain relationships: Timely payments are the lifeblood of MSMEs. By participating in TReDS, corporates ensure their MSME suppliers receive early payments for invoices. This enhances trust, strengthens partnerships, and fosters long-term business relationships.

• Improved working capital management: TReDS enables corporates to manage cash flows efficiently by leveraging invoice discounting solutions. The process does not impact the balance sheet as it is an off-balance-sheet financing tool, thus allowing businesses to maintain liquidity without straining internal funds.

• Enabling MSME growth: MSMEs play a crucial role in India’s economic development. Delayed payments often hinder their ability to invest, grow, and sustain operations. TReDS solves this problem by unlocking capital tied up in receivables, providing MSMEs access to low-cost financing through a regulated platform.

How TReDS benefits corporates

• Seamless digital solution: TReDS offers an end-to-end digital platform, simplifying invoice settlement and reducing manual paperwork. It ensures transparency and efficiency in transactions.

• Strengthened vendor base: Enabling timely payments through TReDS allows corporates to build a stronger and more reliable vendor ecosystem, reducing disruptions in supply chains.

• Competitive advantage: Being part of TReDS enhances corporate goodwill and demonstrates commitment to supporting MSMEs, which can enhance brand reputation and open new business opportunities.

• No impact on balance sheet: TReDS is an off-balance-sheet solution, which means corporate cash reserves remain intact while MSME suppliers receive timely funds.

To know more about how TReDS can help you, read here: https://www.m1xchange.com/thought-xchange/treds-definition/ 

Why M1xchange is the preferred TReDS platform

As one of India’s leading RBI-approved TReDS platforms, M1xchange has been at the forefront of enabling seamless invoice discounting for MSMEs and corporates alike. With a robust digital infrastructure, a wide network of financiers, and exceptional service standards, M1xchange ensures faster turnaround times and maximum value for both buyers and sellers.

By onboarding on M1xchange, corporates can:

• Experience a simple and quick registration process.
• Access a transparent and secure platform.
• Optimise cash flow while supporting their MSME suppliers.

Act before the deadline

The 31st March deadline provides a window for corporates to align with the new regulation and integrate TReDS into their financial operations. By onboarding on M1xchange, corporates can meet their compliance requirements while benefiting from a smarter way to manage working capital.

In conclusion, registering on TReDS is not merely about regulatory adherence but about creating a win-win situation for both corporates and MSMEs. For businesses with a turnover of ₹250 crore and above, the message is clear: act now, register on TReDS, and support India’s economic growth while securing your supply chain.