The average small manufacturer or trader in India — say a琅HARYANA-based auto components firm with 20 employees or a Maharashtra textile unit — handles three distinct payment workflows that are all manual today.
Freight and logistics payments. When a truck leaves the factory, the freight is settled either by the consignee (who pays the driver on delivery) or by the consignor (who receives the proof of delivery and pays the transporter later). The document that travels with the truck — the LR (lorry receipt) or GR (goods receipt) — is a paper slip that the driver hands over on delivery. The accounts person (often the owner or a single office boy) then files this LR, matches it against the transporter's invoice, and initiates a bank transfer or pays cash at the transporter's office. This process takes 3–7 days end to end. Larger transporters like Blue Dart, DTDC, or regional carriers send digital invoices by email, but small fleet operators (the kind MSMEs use for local and regional routes) still operate on cash and paper.
Supplier and raw-material payments. A small manufacturer buys steel, polymer, fabric, or chemicals from a distributor or mill. The supplier typically gives 15–45 days of credit. The buyer's accountant maintains a "party ledger" — sometimes in a Tally file, sometimes on a shared Excel sheet, sometimes in a handwritten register — tracking what is due and when. Every 3–5 days, the owner or accounts person sits with the Excel sheet, prioritises payments based on bank balance, and initiates NEFT/RTGS transfers one by one. There is no systematic reminders system. Suppliers who are not chased do not get paid on time, which strains relationships.
Distributor and dealer collections. The same manufacturer sells finished goods to dealers and distributors. These buyers also get 15–30 day credit. The manufacturer chases collections via phone calls and WhatsApp messages. The accounts person sends a "statement of outstanding" by WhatsApp — a screenshot of an Excel sheet — and follows up until payment arrives. Every month-end, there is a scramble to reconcile what came in against what was due.
Where time leaks. A 15–20 person MSME in manufacturing typically spends 2–4 person-hours per day across these workflows — reconciling, chasing, calling transporters, following up with dealers. Annualised, that is 500–1,000 person-hours per year on payment administration alone. At a conservative ₹300/hour fully-loaded cost, that is ₹1.5–3 lakh per year in pure overhead.
Where money leaks. Small businesses routinely overpay transporters because they cannot match invoices against LRs in time. They miss early-payment discounts from suppliers because they do not have visibility of upcoming payables. They carry unnecessary working-capital buffer because they do not know exactly what is due when. They pay bank fees on multiple small-value NEFT/RTGS transactions instead of batching payments.
The broker layer. For freight, especially for full-truck-load routes, MSME owners typically call a transport broker — either a local broker in the mandis or industrial areas, or a phone-contact broker — to arrange a truck. The broker takes a margin. Payments to transporters are frequently routed through brokers, which adds opacity and delay. This broker dependency is structural; it will not disappear overnight.