Buyer Bank Mapping
Introduction
Mapping a buyer with a bank is an essential process in the DDRX Platform, ensuring that transactions are smoothly processed and financial operations are streamlined. This process involves a few key steps, and specific permissions, such as checker approval, are required to complete the setup. The guidance provided here details how to navigate the platform's interface to configure these relationships effectively. By following the instructions outlined, users can ensure that their banking and buyer configurations are accurately aligned to support their operational needs. This document aims to assist users in navigating through the platform efficiently, making the configuration process straightforward and user-friendly.
Note
A checker approval is needed to successfully map a buyer with bank.
How To Access On DDRX Platform
Platform Panel -> Banks -> View/Edit (of desired bank) -> Set preference -> Configure Buyers
Steps to map a buyer with bank
The following are the steps to map a buyer with bank in the platform.
Go to Banks section in platform panel.
Click View/Edit of desired bank with which you want to map the buyer.
Click Set preference.
Click Configure Buyers. Enter the buyer details as follows:
Buyer Information
Buyer - Select a buyer from a dropdown menu.
Payment File Vendor Code Type -
Financier Code -
Vendor Code -
Account Information
Account Label -
Loan Account Number - Enter the buyer’s loan account number.
Limit Expiry Date - Enter the date when the buyer’s credit limit expires. The date format should be dd/mm/yyyy.
Client ID -
Sanctioned Amount - Enter the amount of credit the buyer has been sanctioned.
Total Opportunity Available - Enter the aggregate amount of invoices eligible for early payment discounts.
Branch Code - Enter the unique branch code of the buyer.
CIF Id - Enter 11-digit Customer Identification File (CIF) number of the buyer.
Note
Read more about CIF.
Payment Instructions
Apply Adjustments On Hair Cut - Choose whether to adjust haircut. The haircut represents the percentage of the invoice value that the bank is willing to pay to the supplier. For example, if a bank applies a 10% haircut to a ₹1,00,000 invoice, the supplier would receive amount of ₹90,000. The haircut amount is determined based on various factors including the creditworthiness of the buyer, the perceived risk of non-payment, and prevailing market conditions.
Program Type - Select the type of program associated with the buyer’s account.
Bank Payment Instruction Channel - Choose the channel through which payment instructions are sent to the bank.
SFTP - Secure File Transfer Protocol (SFTP) is a secure method for transferring files between systems. In this channel, payment instruction files are encrypted and transmitted securely from the platform to the bank's server for processing.
Manual - Send payment instructions to the bank via email.
API - Application Programming Interface (API) enables seamless communication between DDRX platform and bank's payment processing system. Payment instructions are transmitted automacally through API calls.
Payment Instruction File Type - Select the type of file that is used for sending payment instructions to the bank.
Col1 - Col10 - Specify the additional field names that must be added to the payment instruction file.
Additional Information
Notify Corp To Approve Payment -
No - Do not send any notifications to the buyer, including payment instruction file generation or acknowledgment.
Both - Send notification to the buyer upon successful generation of payment instruction file. Also, send acknowledgement to the buyer upon successful invoice payment to the supplier.
On Bank Ack - Send acknowledgement to the buyer upon successful invoice payment to the supplier.
On Payment Instruction Gen - Send notification to the buyer upon successful generation of payment instruction file.
Account Number - Enter the buyer's account number.
Payment Instruction Date Type - Select the type of date to be used for the payment instruction.
Calculated Due Date - The platform automatically determines the due date for the invoice and use that date for generating the payment instruction.
Original Due Date - The platform uses the due date as indicated on the invoice document for generating the payment instruction.
Payment Instruction Amount Type - Select the type of amount to be used for the payment instruction.
Calculated Payment Amount - The platform automatically calculates the discounted amount and use that amount for generating the payment instruction.
Invoice Net Amount - The platform uses the net amount as indicated on the invoice document for generating the payment instruction.
Due Date Adjustment - Select an adjustment to the due date of the payment of invoice.
Pre Shift - The platform adjusts the due date of the payment to an earlier date relative to the original or calculated due date.
Post Shift - The platform adjusts the due date of the payment to a later date relative to the original or calculated due date.
Not Applicable - No adjustment to the due date is required for the payment.
Due Date Adjustment Calendar - Select the calendar used to calculate the due date adjustment.
Payment File Version - Select the version of the payment file.
Alert Email Post Instruction File Transfer - Select an alert email to be sent to the buyer after the instruction file is transferred to the bank.
Copy Files To Corporate -
Payments Supported -
Process Non-fund transactions -
Corporate level approval -
Account Type -
Discounting Program Type - Select the type of discounting program.
Frontend - In the frontend program, the bank charges interest upfront at the time of disbursement. For example, let's assume the bank charges an interest rate of 8%.
If the invoice amount is ₹100 and the supplier offers a 10% discount, the supplier's receivables would be ₹90.
In the payment instruction file, the amount is adjusted to account for the interest, making it ₹97.2 (applying 8% interest on the supplier receivables).
Thus, the bank pays ₹90 to the supplier and collects ₹7.2 (8% interest) upfront at the time of disbursement.
At the due date of the invoice, the bank collects ₹90 from the buyer.
Rearend - In the rearend program, the bank pays the supplier without charging interest. Instead, the interest is charged to the buyer at the time of the invoice's due date.
Using the same example with an interest rate of 8%, if the invoice amount is ₹100 and the supplier offers a 10% discount, the supplier's receivables would still be ₹90.
In the payment instruction file, the amount remains ₹90.
The bank pays ₹90 to the supplier at the time of disbursement and collects ₹97.2 (8% interest) from the buyer at the due date of the invoice.
Comparison between Frontend and Rearend Program
In the frontend program, the bank charges interest upfront and collects it at the time of disbursement.
In the rearend program, the bank pays the supplier without charging interest and collects it from the buyer at the due date.
Cooling Period Applicability - Choose whether to apply cooling period for the loan against buyer. The cooling period is the number of days for which the bank does not charge interest on the loan amount present against the buyer.
Cooling Period Tenor - Enter the number of days of the cooling period.
Spread on Cooling Period Interest Rate - Specify the additional interest rate to be added to the cooling period interest rate.
Block Discounting During Cooling Period - Choose whether to block invoice discounting during the cooling period.
Charge Penal Interest Rate During Cooling Period - Specify whether penal interest should be charged during the cooling period.
Click Save. Upon clicking this button, the buyer mapping details are forwarded to a checker who reviews, validates, and approves the submitted details. Once the details are approved, the buyer gets successfully mapped with the bank on the DDRX platform.
Steps to configure discount rates for the buyer
Note
A checker approval is needed to successfully add invoice discount rates for the buyer.
The following are the steps to add discount rates for the desired buyer in the platform:
Click Rate Configuration.
Enter From Date from which the discount rate should be effective from.
Enter the number of days for which the discount rate should be valid.
Click Add. Upon clicking this button, a Tenure window opens, where you can configure the invoice discount rates and penal interest rates.
Interest Rate
Use this tab to set up various interest rate slabs by specifying the range of days.
Enter the maximum number of days.
Select Rate Type. You can choose one of the two available options to configure discount rates.
Fixed - Specify the Effective Discount % and click Add. Upon clicking this button, the fixed interest rate is successfully added in the list.
Floating - Choose the Benchmark Rate Type, specify the Spread %, and click Add. Upon clicking this button, the floating interest rate is successfully added in the list.
Note
The Fixed option is selected by default.
You can configure either Fixed or Floating interest rates for the specified range of days in a slab.
Repeat steps 1 and 2 if you want to add another interest rate slab.
Penal Interest Rate
The penal interest rate is the additional interest charged to the buyer after the invoice due date. Use this tab to set up various penal interest rate slabs by specifying the range of days.
Enter the maximum number of Days Past Due.
What is Days Past Due (DPD)?
DPD refers to the number of days beyond the invoice due date that the payment remains outstanding. It indicates the delay in payment from the buyer to the bank beyond the agreed-upon terms.
For example, if an invoice is due on January 15 and the buyer makes the payment on February 1, the Days Past Due would be 17 days (February 1 minus January 15).
Enter Penal Spread Interest % and click Add. Upon clicking this button, the penal interest rate is successfully added in the list.
Repeat steps 1 and 2 if you want to add another penal interest rate slab.
Click Submit. Upon clicking this button, the discount rates are forwarded to a checker who reviews, validates, and approves the submitted details. Once the details are approved, the discount rates get successfully added to the buyer in the DDRX platform.
Last updated