Bagheria’s CashFlo is among the companies working towards tackling these challenges and also helping them and their supply chains to grow faster by providing easy and fair access to liquidity.
In an interaction with ET Digital, he shares his views on the situation of finance automation in India and how larger issues of supply chain financing can be resolved. Edited excerpts:
Economic Times (ET): What is the condition of finance automation in India?
Ankur Bhageria (AB): According to a 2022 survey, only 9% of businesses globally have fully automated their accounts payable (AP) function, and it’s even lower in India. This creates several challenges, including increased stress for AP teams, heightened risk of errors, and problems in decision-making. Moreover, it results in suboptimal cash flow optimisation and strained supplier relationships, impeding the growth potential of enterprises across industries.
It’s not that automation isn’t on a CFO’s mind. But there’s a dearth of B2B SaaS companies in the business finance space operating at scale in India. Most companies offer a suboptimal solution, optimised for Western markets. With our new AP automation & payments suite, we want to change this. Our solution is made in India for India. For instance, our goods and services tax (GST) check-and-hold feature is fully compliant with the GST laws.
ET: How does CashFlo solve the larger issues of supply chain financing plaguing India?
AB: Our primary goal is to enable enterprises and their supply chain to grow exponentially by having easy and fair access to liquidity when required. We worked very closely with enterprise finance teams to make this happen, and our vendor financing product was born out of this vision. We have since brought onboard over 3,000 customers whose supply chain constitutes over 200,000 SMEs. We have facilitated over Rs 18,000 crore in payables.
In our experience of running a vendor financing platform over the last few years, we have identified one recurring pain point every finance leader seeks to address: inefficient AP processes. Our vision was to create a high-quality, yet affordable product tailor-made for India.
Invoice booking and payment processes lacked controls, visibility and the entire process was manual and error-prone. This was another area we thought we were appropriately placed to address. This realisation led us to venture into an AI-powered AP product suite designed to ensure 100% compliance with government norms, streamline complex payment processes, and enhance overall efficiency for finance functions. The product simplifies critical tasks such as invoice-to-pay processes, approval workflows and real-time GST checks. By automating these essential functions, we are aiding companies in eradicating manual work, thereby alleviating the stress on AP teams and minimising the risk of errors. Consequently, our suite empowers businesses to achieve unmatched operational excellence by augmenting decision-making capabilities, optimising cash flow, and fostering stronger supplier relationships.
During the pilot phase, we saw our AI-powered AP & Payments Automation solution slashing processing costs by up to 80% and accelerating financial closure by 3x for growing large and medium enterprises. Moreover, businesses experienced significant reductions in payment errors and witnessed improved margins of up to 7%, all while ensuring full compliance with regulatory requirements.
ET: What are CashFlo’s views in terms of automating payments processes for enterprises?
AB: Payments form a very important and critical part of the finance function. I think when you are sending out money, even small errors can have large consequences. So, it’s important to have tight control and zero errors in this part of the process. I think automation solves both. When we started building our payments product, we spent over a year doing primary research — understanding how B2B payments work today, and how we can make the process more efficient.
What we realised was that there were few instances of automation, compliance was put on a back seat and there was a lack of visibility in payment processing. Integrating with banks took months, at times years, and most banks offered no integrations at all. For a vendor, there was little clarity on when a payment would arrive. Consequently, vendors would constantly follow up for updates via phone calls. Overall, the process was time consuming, cumbersome, and error-prone. We wanted to fix these issues. Which is why we built in vendor onboarding and compliance checks into the system.
CashFlo enables payments via over 20 banks and is aggressively expanding that list. Bring any bank you work with, and we will integrate it with any ERP you work with. What’s more, each time you make a payment, your bank, ERP and accounting software are all updated by CashFlo. So, all your accounts are 100% in sync. We even send the vendor a detailed payment receipt, so they know their payment has been processed. I think this is a massive step ahead in terms of automation and process improvement.
ET: How is the company helping MSMEs across the country?
AB: We have built a platform that allows MSMEs to optimise their working capital by collecting payments early from their customers and/or making payments later to their suppliers — all at their discretion, with a simple click, with never-before-seen convenience and credit access, providing them with increased control over their working capital. We enable MSMEs to improve their cash flow, access working capital on their terms, and fuel their business growth. As a result, CashFlo is now one of the fastest-growing B2B payments platforms in the country, processing over Rs 18,000 crore worth of invoices, and growing at 200% year-over-year. Corporate treasuries have also become a key source of invoice discounting for SMEs and MSMEs on our platform.
With our AP automation and payments products, we are providing SMEs with transparency. Through the vendor dashboard, they know exactly when their payment is due, and when they can expect to be paid. From the same vendor dashboard, they can also request early payments from the buyer, in lieu of cash discounts, and the buyer can decide to take the discounts or not. This provides them with easy access to liquidity, instantly. Liquidity that they can plough back into growth. The entire AP automation and payments product is neatly tied in, allowing for product functionality that can benefit the entire supply chain.
ET: What are CashFlo’s growth plans?
AB: We are working towards expanding our customer base by threefold and aim to double our invoice processing volumes by the end of 2023. With a growth rate of 25% month-on-month, we anticipate achieving a 150% growth rate in the next six months. Our AI-powered AP Automation & Payments product suite is a key driver of this growth which will help us revolutionise corporate finance functions and set new industry standards. We will continue to innovate and enhance our suite of offerings for the CFO function, and remain committed to empowering businesses across the country with state-of-the-art technology and cost-effective solutions for their financial needs.
We estimate impacting over 10 lakh businesses across India as the company grows. We see that automation and supply chain financing can help companies save 5-7% in the bottom line. If we were to scale this up, the cost savings can be massive.
