How It Works

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Methodology

Consider a business A, which owes Business B which in turn owes money to a vendor C, who in turn owes money to A, the netting off can be done between these businesses, and arrive at optimal transaction where C pays to A. This would thus reduce the currency involved, reduce the number of transactions and also reduce the working capital required by the business A and B.

Invoice2Cash has devised an algorithm which would take the Input as the sales invoices and purchase invoices from the Businesses onboarded and gives the output as Credit notes after the netting off has been done for the receivables and payables across all the businesses.

Netting off cannot be done 100 percent, however the algorithm works in such a way that the currency involved in making the transactions would at least come down by 50%.

The algorithm works primarily on Commonality. Commonality is achieved when the business is onboarded and along with the business, the related customers and vendors of the business are onboarded on to the system.

Invoice2Cash has tested this algorithm for a business using an accounts system Tally. Invoice2cash also uses SAP tool to record the inputs for the algorithm for netting off. This SAP system is an automatic system meaning, if a sales order is entered for a business the corresponding purchase order is automatically inserted into the related business in the system.

How it is done?
1) I2C will connect you with a huge network of vendors and purchasers.
2) They will upload their invoices or purchases and will be accepted by both parties for verification.
3) This will create a genuine transaction value
4) Thereafter the invoices are run through a proprietary netting algorithm and an optimal solution is generated.
5) Also, we will try to net of maximum transactions, for this groups are created for best netting of payments that are to be made.
6) But all the parties should give their cheques payable to their vendors (even without balance in their accounts)
7) This is processed at a Single Bank where all the network subscribers have an account and then processed.
8) The actual party that needs to pay the amount (Should have the amount in their account) will be notified 5 days in advance.
9) The clearance of the entered transactions will be made periodically, i.e. Every 10 Days, 20 Days, or Every Month.