TBXONE simplifies and accelerates cash collection and revenues for retail suppliers
For more than 4 years, Indonesian retail suppliers have used TBXONE to accelerate their cash collection, and have seen their revenues increase together with their counterparties’ revenues.
Global 500 companies operating in Indonesia–domestic large, medium, small, and even micro businesses–use TBXONE to optimize their working capital and increase their sales to their retailer outlets.
Clients: Unilever, Nestle, Danone, Friesland Campina, Procter and Gamble, Coca Cola, Samsung, Panasonic, Microsoft, Garuda Foods, Kalbe, Mayora, Indomarco, Pocari Sweat, and thousands of other companies.
Industry sectors: fast moving consumer goods (FMCG), electronics, telecommunications, fresh goods, furniture, beauty and health, beverages, and others.
Challenge: Unlock liquidity in the supply chain by accelerating cash collection from their retailers.
Solution: Retail suppliers across Indonesia choose and use the TBXONE platform for greater visibility on their order-to-cash collections with their retailers. Thousands of suppliers attain access to their purchase orders, receiving notes, invoices, and other e-documents within their retailers’ back-office systems.
Results: With TBXONE, Indonesian retail suppliers receive all their supporting supply chain documents online. Improved retailer relationships result from decreasing days disputes online, unlocking cash to accelerate their sales and thus improving their supply of working capital.
While traditional markets still account for the majority of retail food sales in Indonesia, modern retailers hold a significant and growing share. Traditional retail outlets–wet markets and independent grocery stores–are gradually but inexorably replaced by modern outlets. Hypermarkets, supermarkets, and minimarkets are developing rapidly as Indonesians purchasing power increases. Due geographic isolation within the Indonesian archipelago, distribution systems are inevitably complex. A number of national distributors, generally subsidiaries of consumer goods and food manufacturers, serve the entire nation. Numerous agents and distributors with a more local reach remain important. Indonesian retail distribution thus differs from that in Western developed markets, with thousands of suppliers necessary for on-shelf-availability (OSA).
Before using TBXONE, suppliers received their purchase orders by fax and delivery receipts printed by the stores or distribution centers, and they sent invoices payment. The process, from order to cash collection required some 8 to 12 weeks. Within this period, if disputes arise on payments, both suppliers’ and retailers’ sales are threatened by falling service levels. A medium or large Indonesian retailer processes more than a half million purchase orders, receiving advices, and invoices with their supplier base monthly.
All retailers previously processed these documents on a semi-manual basis, sending the PO by email, printing documents on receipt, and delivering the invoices back to the retailer. In disputes, suppliers must make appointments with the related departments and normally resolution requires weeks. In cases of long term disputes, sales decrease for both parties due to effects of retailer credit limits, non-deliveries, lack of shelf availability, and falling service levels–all equate to loss of revenue.
As of today, lucky suppliers receive their supply chain supporting documents online from TBXONE, simplifying the manual-to-online collaboration process all on one platform. Suppliers now have visibility into their order-to-cash process.
- See document status: new, read, processed, paid, etc.
- Dispute settlement in cases of quantity or price disputes
- Settle or confirm returns and credit-notes
- See the status of remittance collection.
Collaboration brings new challenges in the ways of work processing, and thus change management programs must be in place to achieve success. PT Terbit Financial Technology (TFT) provided thousands of suppliers training on the new systems. TFT used their best practices and proven change management methodology–the Terbit Rapid Adoption Program or TRAP. See the case study: How TRAP accelerates benefits through collaboration.
Processes suppliers gain are:
- Purchase Orders (PO)
- Receiving Advices (RA)
- Pro-forma invoices
- Invoices (Barcoded)
- Dispute settlements on quantity and pricing
- Remittance notes (RN)
- Return invoices (RI)
- Credit notes (CN)
Figure 1. LotteMart back-office process integration with TBXONE.
- Supplier settles the quantity with the respective receiving department through receiving advices (RA) documents. In case of disputes, both parties can track and trace the disputes through all document versions
- Supplier settles the price with the procurement department through a pro-forma invoice (PFI). In disputes, both parties can track and trace through all document versions
- Whether disputes are settled or not, a settlement document is generated for the supplier. This settlement document can be used as an invoice and sent to the retailer for further processing.
- In Indonesia, suppliers must present and scan a copy of the barcoded invoice and a copy of the e-tax (QR coded) invoice to retailers for a final document audit.
- After invoice control receives the two mandatory documents the transaction is posted for payment.
- Process management by department is implemented within 24 hours, and KPI reports are sent daily to the retailer users and their supervisors.
All invoices are used with 3-D barcode scanners to speed up the document handling; see this document scanning process in action here.
What do Indonesian retailers achieve by implementing TBXONE SRC solutions?
- Efficiency throughout the Order-to-Payment departments
- Speed-up of dispute settlements, from 10 or 20 days to a maximum 2 days!
- Quick adoption program provided
- Increased service levels, equating to increased revenues
- Become the preferred and most agile retailers in Indonesia
- Provide visibility throughout the collaboration process
- Overall improvements in available working capital.
- Platform: TBX SRC
- Business model: Cloud solution
- Integration: SFTP with SAP FICO
- GO-LIVE: in 1 month, with 2 months of stabilization
- Supplier network: more than 9,000 users to date, and growing
- E-documents: more than 1 million.
All these and other benefits continue! Retail Indonesia keeps supporting its suppliers in improving working capital, so that they can grow together. See the case study: Early payments to suppliers accelerates growth of LotteMart Indonesia. And what benefits do retailers gain from using TBXONE? See the case study: LotteMart benefits using TBXONE SRC.