From invoice to cash: finding efficiencies through digital co-creation

Treasurers across Asia face similar demands: support their companies’ growth internationally while addressing local specificities and regulatory nuances in different countries, all while innovating to stay ahead of technological advances.

At a recent BNP Paribas treasury event in Singapore, 94% of treasurers surveyed stated that they were working on KPIs for cash forecasting in their regional treasury centres, along with digitalising payments and receivables processes and accounts receivable reconciliation.

As improvements in these areas can significantly enhance visibility on cash positions and reduce manual input, some corporates are pursuing a new strategy to address the demands of today’s environment – co-creation with banks, and increasingly, fintechs.

Danone and Espay: a payments and reconciliation solution for Indonesia’s segmented digital banking space

French multinational Danone, which distributes many of its water and nutrition products across a range of jurisdictions, offers a clear example.

“In treasury, it’s important to get the basics right: cash is king,” says Kim Mui Tan, Senior Treasury Manager. “Only after the basics can we talk about improving efficiencies in moving things faster from A to Z.”

For Danone’s operations in Indonesia, these basics include handling payments in a dynamic but emerging market with widely differing capabilities and preferences around digital banking.

“In Indonesia you have the city centres themselves, but you also have the rural areas where we need to have collections done in a more efficient way,” explains Tan, as the group’s water business covers the whole country, but must tackle regional variations.

Joshua Dharmawan, President Director of Indonesian payment gateway Espay, concurs: “Indonesia is a huge country geographically, with three time zones, and to deliver goods from the principal to the end user is quite challenging.” QR code technology exists, but its use is not universal, and many customers prefer to deal with a local bank. “In Indonesia there are 50-plus banks, and each customer has their own preference,” Dharmawan says.

A collaborative solution

The answer was teamwork between Danone, Espay, and BNP Paribas. Espay – integrated with Danone’s Enterprise Resource Planning (ERP) system ­– provides a single invoice portal which encourages the use of electronic payments and invoicing rather than the paper invoices still widespread in parts of Indonesia.

This way customers can still use their preferred banks, with no need for Danone to set up an account with each as Espay intermediates between them. Payments come through to BNP Paribas and the system brings an improved ability to monitor the accounts receivable.

 “This system saves time for our Treasury team, enabling them to focus on more value-added tasks,” Tan says. “Danone and BNP Paribas receive the cash faster, and customers are happy because they can still pay from their own bank.”

Dharmawan adds: “With digital payments we can improve efficiency and reduce fraud.”

A changing attitude

One of the factors driving these new solutions is the changing corporate attitude towards fintechs. 61% of treasurers at the BNP Paribas treasury event in Singapore said they could work with fintechs provided they are referred by banks, and 39% said they would work directly with them without a referral. None at all said they could not work with fintechs, marking a clear shift.

“Only five years ago, it was a unanimous no from corporates being asked if they were willing to work with fintechs,” says Rupa Balsekar, Head of Transaction Banking, Southeast Asia, BNP Paribas. While a referral is still preferred because it brings confidence, Balsekar adds: “Banks have done the due diligence and analysis, have seen that these fintechs are robust, and have concluded that they bring value.”

Xendit: a collection API tackles a volume refund challenge in Vietnam

Vietnam offers another example of co-creation with Xendit, a local fintech that aims to build a seamless, efficient, digitalised payment platform for merchant customers.

Xendit worked with BNP Paribas to support a multinational in Vietnam’s B2C space to streamline its customer refunds process, which previously involved requesting customers’ bank account details and manually reconciling with the company’s own numbers, then contacting the different beneficiary banks to deposit the funds.

The solution was a collection API pushed out directly to consumer email accounts. That email allowed customers to add their bank accounts and cash their refund, with the whole process automated and visible in a dashboard. “This has succeeded in reducing a significant portion of the efforts in the whole process, empowering our teams to create value for the end consumer,” says CFO Boon Wei Lim.

Automation tools for a new environment

Some innovations offer a simple plug-and-play format. One example is DocFactory, a BNP Paribas proprietary tool developed to automate the extraction of information, used to parse payment notices and simplify the accounts receivable reconciliation process for treasurers.

DocFactory leverages AI to glean key relevant fields of corporates’ payment advices across multiple templates, automating the data capture and extraction process. The machine learning technology behind the system helps DocFactory to improve over time in identifying important fields, even for new templates.

Introducing DocFactory

The resulting file can be directly integrated into the corporate’s own ERP system, providing treasurers with a consolidated view of all incoming receipts without needing to go through the advices manually. DocFactory was awarded Editors’ Triple Star at The Asset Triple A Treasurise Awards 2024.

“Our treasurers’ feedback on these innovations has been very positive,” says Balsekar. “The combination of product co-creation, local payments capabilities and a willingness of corporates to embrace partnership has proven to be a recipe for success for treasury functions in the region.”