Ashwani Rathore, CEO and Co-founder, SpiderG, points out the rather widespread tardiness with payments across enterprises, to the extent that vendors that supply to government organisations, for example, may charge higher rates or even prefer to work with some private firms as a result of not receiving payments on time. Clearly, the aggregate effect of this is more serious than just a vendor not receiving his payments.
“Europe and South America have opened up to e-invoicing. And I have to say some State government organisations in India are warming up to the idea. The Indian economy has to go digital, especially in transactions.”
“You can’t expect vendors to depend on banks to keep funding their working capital. We feel our offering will help organisations transact smoothly and work better with each other,” says Rathore.
SpiderG’s own research finds that close to 70 per cent of Indian SMEs face a working capital crunch; their needs are not met by existing financing options as they have to depend on company’s historical records and need collaterals. Very often, it is not about a cash crunch as much as the visibility of the cash situation – when companies plan in advance, they manage their capital better. The Cash-Cal feature on SpiderG arranges a company’s account receivables and payables in a calendar view format with an option for automatic alerts. Imagine the effect of this when most SMEs rather than a few adopt the advantage of e-invoicing.
What SpiderG is aiming for, eventually, is to have the mass in the short- to medium-term that allows for a network of clients and vendors on it platform.
“Better use cases will emerge from a network. And a rating system becomes possible. Both clients and vendors are able to rate each other on delivery and payments. It gives small enterprises the power to choose who they do business with,” Rathore says. Arguably, this can make one facet of Digital India a satisfying reality.
Source: Business Line
Image Courtesy: The Hindu Business Line