Best in Class Treasury Solution in India Highly Commended: Visteon Electronics India Pvt Ltd

Published: Apr 2021


Photo of Jessica Cao, Rajasekhar Ramalingam and Sathish Kathirvel, Visteon Electronics India Pvt Ltd.

Jessica Cao

Senior Manager, Visteon APAC Treasury

Rajasekhar Ramalingam

Assistant Manager AP & Treasury

A Fortune 500 company, Visteon is a global automotive electronics supplier that designs, engineers and manufactures electronic parts and systems for global automobile companies like BMW, Daimler, Ford and General Motors.

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Host-to-host connectivity delivers import payment solution for this Indian auto supplier

The challenge

Visteon has over 40 facilities in 18 countries and India is one of its key overseas manufacturing locations. It imports from vendors across the globe, and maintaining good relationships with these vendors is of utmost importance for ensuring continued seamless production, as well as securing critical supplies during a production crunch. Key to maintaining these relationships is timely payment to its vendors, which can be an uphill task for Visteon which processes close to 5,000 invoices and makes approximately 320 payments to 400 suppliers on average every month.

Its cross-border payment process was paper-based and involved scanning and sending all the required documents to its banks two days in advance. The scanning process alone took eight hours and required two full-time equivalent (FTE) staff to do the job. Once the documents have been validated by the banks, Visteon initiates debit instructions for making these payments. The end-to-end process took ten hours over four days from the date of scanning the documents.

Given the regulations and rigorous guidelines governing import payment in India, Visteon was looking for an import payment solution that would enable it to achieve the following strategic objectives:

  • Improve on-time payment to vendors.
  • Optimise payment efficiency by reducing its cycle time.
  • Streamline and automate its payment processes leveraging technology.

The solution

Working with Bank of America, Visteon was able to establish host-to-host (H2H) connectivity between its ERP system and the bank’s systems while going paperless and having updated access to Reserve Bank of India’s Import Data Processing and Monitoring System (IDPMS). The solution provided was recently enhanced to enable an even higher degree of data capture from existing data in RBI’s IDPMS, thereby significantly reducing the need for data input by Visteon and consequently, errors from manual data entry. Visteon is now able to validate the enriched captured data before it goes to IDPMS.

Additionally, Bank of America has established a middleware which uses a combination of manual input and interface with RBI’s IDPMS to ensure a paperless experience for Visteon, even for items which would typically not appear in RBI’s IDPMS system.

Best practice and innovation

Digitisation has been a key focal area for the Government of India and the Reserve Bank of India in recent years and IDPMS is a good example of a system aimed at facilitating the ease of processing and monitoring of import transactions. Bank of America was one of the few banks with a H2H solution for supporting cross-border import payment.

Key benefits

Increased the operational efficiency of its payment team by almost 75%. Besides improving workflow efficiency, the solution also helped Visteon gain 15 working days per month among other benefits including:

  • Improved on-time vendor payments from 85% to 98% (15% improvement).
  • Reduced queries from vendors from 70 to 18 per month (down 87%).
  • Improved cycle time to process payment from 10.33 hours per week to 5.33 hours (~50% improvement).
  • Reduced printing of invoices while supporting the company’s sustainability and green initiatives.
  • Improved cost efficiency with the number of FTE required.

Moreover, Visteon can now assess transaction status on the RBI database, updated each day, for more timely reporting purposes.

“From a process improvement point of view, the H2H solution helped us gain tangible results that met/exceeded the goals set by our management. But this solution is not just for our benefit, it also goes toward helping support our vendors optimise their receivables management. Moreover, with lower number of queries, we are further improving our relationships with our vendors,” says Jessica Cao, APAC Treasury.

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Shankar Bellie

Corporate Banking Group – Multinational Clients, Relationship Manager
Bank of America

We started a dialogue with Visteon in 2018 working with them on their cross-border flows. The solution is a game-changer as we have completely digitised their entire payments process via a host-to-host set up. This is a winning solution because of two key measures. First, the payment process has been totally transformed with major cost savings in terms of resources which Visteon have been able to reassign to more value-added tasks. This has been the biggest benefit to the Visteon treasury team. Additionally, the project has delivered an impressive cost/benefit analysis.

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