Corporate Guide to TReDS Platform Onboarding Before March 31, 2025

Corporate Guide to TReDS Platform Onboarding Before March 31, 2025

The March 31, 2025, deadline for TReDS onboarding is fast approaching. Now is the time for corporates to ensure compliance and leverage the benefits of this crucial platform.

By enabling companies to sell their outstanding bills to banks and other financial institutions, TReDS, or the Trade Receivables Discounting System platform, improves cash flow and lessens dependency on conventional loans.

This blog post serves as a comprehensive guide for corporates, outlining the information for the TReDS onboarding process 2025.

1. Information About TReDS Mandate

Here, businesses will get detailed information about this mandate.

Government of India Mandate

The Ministry of MSME has mandated that certain companies must onboard themselves onto Trade Receivables Discounting System (TReDS) platforms. This mandate applies to those companies registered under the Companies Act, 2013, with a turnover exceeding INR 250 Crore and Central Public Sector Enterprises (CPSEs).

By doing this, the government plans to:

·       Promote the use of TReDS platforms: Encourage wider adoption of TReDS for invoice discounting among businesses.

·       Improve MSME Financing: Facilitate quicker access to funds for MSMEs by streamlining payment processes.

·       Enhance Financial Inclusion: Promoting a more inclusive and efficient financial ecosystem for businesses.

Consequences of Non-compliance

·       Businesses that disregard the TReDS onboarding criteria can be subject to fines from the government. These sanctions could take the form of fines or other harsh actions.

·       A company's reputation can suffer as a result of non-compliance, especially among its stakeholders and suppliers.

·       Onboarding delays have the potential to impair growth and cash flow by upsetting business operations.

·       Businesses may not be able to take advantage of TReDS's advantages if they do not comply.

Benefits of TReDS Onboarding for Corporates

TReDS onboarding offers several significant advantages for corporates, that are:

Better Supplier Relationships:

This platform facilitates quick payments to MSMEs, and this will result in better supplier relationships and foster a business ecosystem that is more collaborative.

Enhanced Cash Flow Management:

·       Payment Cycles that are Predictable: By offering an organised framework for invoice payments, TReDS can contribute to increased cash flow predictability.

·       Decreased Working Capital Requirements: TReDS might lessen the demand for sizable working capital buffers by enabling quicker supplier payments.

Simplified Operations:

·       Less Administrative Burden: By automating the processing of invoices, administrative overhead is decreased and internal resources are freed up.

·       Enhanced Efficiency: Simplifies payment procedures, increasing productivity and operational efficiency.

·       Enhanced Transparency: Offers an auditable and transparent mechanism for processing and paying invoices.

Other Benefits:

·       Social Responsibility: Supporting MSMEs and encouraging ethical business practices are demonstrated through onboarding to TReDS.

·       Improved Image of the Brand: Positive supplier connections and a reputation for quick payments may strengthen the company's brand image and reputation among stakeholders.

2. Steps to Complete TReDS Onboarding Successfully

The following are the TReDS platform registration steps for successful onboarding.

Selection of Right Platform

Research and select a TReDS platform based on factors such as RBI approval, turnaround time, fee structure, security features, and customer support.

Document Preparation:

·       Learn about document requirements for TReDS Registration.

·       Gather all necessary documents, including company registration documents, bank statements, KYC documents, GST registration, and any other required documents as per the chosen platform.

System Integration

Integrate the TReDS platform with the company's ERP or other relevant internal systems for seamless data flow.

3. Tips for a Smooth Onboarding Process

·       Start Early: Begin the onboarding process well in advance of the March 31, 2025, deadline.

·       Maintain Clear Communication: Maintain clear communication with the chosen TReDS platform company throughout the onboarding process.

·       Address Issues Promptly: Address any issues or concerns that arise during the onboarding process promptly.

·       Employee Training: Train relevant employees on using the TReDS platform effectively, including invoice uploading, tracking payments, and resolving any issues.

So, here is the information for businesses regarding TReDS onboarding. Businesses need to know about M1xchange, which is one of the TReDS platforms in India.

Launched in 2017 by Mynd Solutions Pvt. Ltd., M1xchange is an RBI-authorised TReDS platform operating under the Payment and Settlement System (PSS) Act. This innovative platform empowers MSMEs by facilitating the rapid conversion of receivables into cash through invoice discounting.

Key Strengths of M1xchange:

  • Competitive Financing: M1xchange leverages a competitive bidding process among a diverse pool of lenders, enabling MSMEs to access affordable financing at competitive rates.
  • "Without Recourse" Financing: It uses "Without Recourse" financing for MSMEs, minimising their risk exposure.
  • Technology-Driven Approach: It utilises cutting-edge technology to ensure the authenticity and security of all transactions, enhancing transparency and trust within the ecosystem.

Conclusion

All the information related to this onboarding, including basic information about the government mandate and steps for registration, is created to provide TReDS 2025 Deadline Awareness to the businesses.

Launched in 2017 by Mynd Solutions, M1xchange is an RBI-authorised TReDS platform that is revolutionising the way MSMEs access finance. By leveraging a competitive bidding process and cutting-edge technology, M1xchange empowers MSMEs with rapid access to affordable funding through efficient invoice discounting.

 


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