Photo of Saurabh Gupta, Citi, Saleem Qidwai and Praveen Juyal, Amway India Enterprises Pvt Ltd.

The solution implemented by Amway aligns with the government of India’s mission to digitise financial services. The solution harnesses technology on both the accounts payable and accounts receivable fronts and also includes host-to-host integration with the company’s ERP.

Solution aligns with government of India’s mission to digitise financial services

The challenge

“We identified four major challenges in early 2016 which we have been facing in India for over a decade, both in accounts payable and accounts receivable and collection management,” recalls Bikash Mukherjee, AVP – Head of Treasury.

1. Paperless import payment.

   Mukherjee explains, “We identified the challenges which were majorly administrative delays associated with movement and sharing of documents, manual activity, time-consuming and limited capabilities to create current and future dated payment through the channel.”

2. Real-time customer bank account validation.

3. Cheque repository solution:

   • Flow of information on dishonour of cheque delayed. Average time taken 15-20 days.
   • Subsequent delay in the flow of information to the store/Amway Business Owners (ABOs) leading to further delays in the recovery process.
   • Delay in handing over the rejected instruments to the ABO.
   • Reconciliation process is also impacted, as matching criteria is based on the instrument number.
   • Loss in revenue by Amway India Enterprises.
   • Manual intervention in the flow of information and physical instrument from bank to HO to store to ABO.

4. UPI payment and import solution.

   Given import payments are heavily regulated and time-sensitive in nature, and the issues with collection from ABOs, Amway was looking for a solution to realise the following objectives:

   • Automate processes: ensure zero errors and end-to-end process automation.
   • Digitisation: eliminate the paper requirements in the import process.
   • Real-time tracking: provide real-time visibility of the transactions.
   • Efficiency in processing times: efficient and seamless payment and collection processing.
   • UPI based API: provide 24/7 availability, instant fund transfer and easy to use platform.
   • Optimise the working capital cycle: reduce DSO by efficient use of new technology and payment methods.

The solution

In partnership with Citi, Amway implemented a paperless import remittances solution. It enables end-to-end automation of import remittances via guaranteed and secure transactions. In addition, the host-to-host integration also enables Amway to seamlessly handle increasing volumes of import payments. As a result, document processing now requires less effort, tracking is more centralised, turn-around time considerably reduced and the volume of payments is much less challenging. The bank also helped Amway implement a UPI-based collection method on their ABO app. The solution allows instant collection of funds transferred by ABOs, with 24/7 availability.

It is also implemented via host-to-host integration with the ERP.

The paperless import payment and cheque imaging solutions were delivered by Standard Chartered. Bank account validation was developed by IndusInd Bank.

Best practice and innovation

By harnessing technology, both on the AP and AR front, Amway India has not only been able to achieve its business goals of increasing revenues, footprint and efficiencies but has also been able to make a social impact in an under-developed region of the country, especially in UPA payment mode. Amway has created value by leveraging the digital platforms developed by RBI and NPCI. This solution aims at supporting the government of India’s mission to digitise financial services, which will help improve efficiency and transparency. The digitisation of import payments is an end-to-end automation which provides Amway with effortless document processing, centralised tracking and reduced turnaround time. The UPI-based payment method for ABOs is unique, as it leverages UPI capabilities in a B2B setting. It is faster and provides better working capital management. Also, as it is linked with the Amway’s ERP system it further resolves reconciliation issues faced by the company.