Benefits

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Working Capital Reduction – The main benefit of this system is reducing the working capital required by a business. When the netting off is done, and not every party involved has to pay its bill, and only the resultant parties of the netting off algorithm are required to pay the currency, the other parties involved will not need capital to make the payments. Hence, this reduces the working capital required.

Save Interest on Working Capital – When the requirement of working capital is reduced, the interest incurred by each of the parties is reduced. Hence, each of the businesses saves on the interest that is to be paid on the working capital.

Regular Flow of Orders and Raw Material – When the netting off is done, and there is no delay in the payments being processed as many of the parties will not need to make currency payments, and the credit notes are received, order processing for goods/services and for raw materials is not delayed and the flow of these is regularized.

Increase in Current Ratio – When the liabilities are decreased and the assets are increased, i.e., the balance sheet becomes light, the current ratio of the business is increased which is a good sign of the performance of the business.