Hyd-based startup Recordent helping resolve India’s Rs 10.7L cr payment dues challenge

The Covid-19 pandemic was a blessing in disguise for SaaS (software-as-a-service) startups as it fast-tracked acceptance of technology among old-school businesses. In India, across the SME sector a pressing concern was present which needed to be addressed by the intervention of innovation. Hyderabad-based startup Recordent was set up in 2020 to tackle this significant challenge in India, an outstanding sum of Rs 10.7 lakh crore payments pending within the industry. Winny Patro, CEO and Co-Founder, Recordent India speaks to Bizz Buzz about the significance of finding an effective solution to address payment dues among SMEs and effective cash flow management for businesses

What led you to establish Recordent during the pandemic?

Setting up of Recordent in 2020 was driven by our first-hand experiences with previously managed companies. We understood the hardships of dealing with delayed payments, which significantly impacted cash flow and presented various operational challenges. Faced with these situations, we recognised the pressing need for a solution to address these real-world problems. The motivation stemmed from these challenges, driving us to create Recordent with the goal of helping businesses navigate and manage their cash flows more effectively.

The number of clients onboarded till date and their size of business…

In India, a total of 11,200 businesses are currently utilising the Recordent platform, with over 4,000 of them actively engaging with one or more features offered. Specifically, in Telangana, we serve 760 clients, and in Andhra Pradesh, we cater to 272 clients, indicating regional adoption trends. The scale of our client businesses varies widely, ranging from companies generating revenue between Rs 2 crore to well over Rs 1,000 crore, showcasing the diverse spectrum of enterprises benefiting from our services.

What is the total amount of dues submitted, and credit reports available on the platform?

Since 2020, the platform has accumulated Rs 8,78,936 lakh customer dues, and these numbers consistently increase as the website undergoes real-time updates. With regards to the credit reports, they are sourced from the Equifax Credit Bureau as and when required and are not directly available on the platform.

What was the payment trend during the pandemic, when flow of credit had taken a back seat as earnings of SMEs were hit, as against the present?

In the initial launch phase in 2020, our pilot product offered around 20 per cent of the comprehensive solution available today. During that period, the primary challenge observed was delayed payment receipts, leading to a notable shift among businesses adopting cash and carry practices. This shift mirrored the broader economic challenges prevalent during the pandemic. However, over time, there has been a noticeable evolution. Businesses gradually recovered, and on Recordent’s platform, we have observed a positive shift in payment trends. This shift indicates an improvement from the initial challenges, signifying a more positive trajectory in payment behaviour.

What are the services you provide to your customers?

Enterprises gain access to a comprehensive suite of tools designed to seamlessly manage the entire credit and collection cycle. The journey begins with a thorough credit check of buyers during onboarding. Once credit is extended, businesses can efficiently handle invoices through the platform. A unique feature is the creation of personalised dashboards for buyers, each with distinct web links. These dashboards empower buyers to review raised invoices, pending amounts, and debit notes, offering a tailored and transparent experience to manage transaction/payments. Additionally, enterprises can automate collection reminders using SMS, WhatsApp, IVR and email for invoices before and after due dates. An exceptional feature, similar to a CIBIL credit registry, enables proactive messaging to buyers, signalling credit behaviour trends. Recordent conveys messages on behalf of sellers, encouraging prompt payments and fostering a positive credit track record. Recordent offers features resembling bank statements, enabling sellers to send account statements to customers. In cases of non-payment, the platform facilitates sending of cautionary and legal notices which can be confirmed based on DPD or seat on demand. A key aspect of Recordent’s service is the Credit Analytics component, allowing businesses to monitor and adjust credit terms, periods, and limits. Sellers can use this data to forecast cash flows, providing a comprehensive credit-to-cash cycle management solution. Essentially, enterprises gain a robust toolkit for efficient credit management and operational foresight upon joining the platform.

What are the subscription plans available and its fees?

Recordent provides three subscription plans catering to varying needs. The Gold plan offers a free membership with 300 complimentary credits. The Platinum plan, priced at Rs 8,500 plus taxes annually, provides 10,000 credits. These credits can be used for sending payment reminders, making the Platinum plan a cost-effective option. The Diamond plan, the most comprehensive offering, priced at Rs 50,000 and more per year, delivers significant impacts on businesses’ profits and cost reduction. Users of this plan benefit from a dedicated support system and a personal relationship manager.

How is the trend of payments in Telangana, Andhra Pradesh compared to other cities?

When analysing payment trends among businesses across cities where Recordent operates distinctive variations become apparent. Different locations exhibit significant differences in credit periods. For example, in Bangalore, the credit period tends to surpass 90 days, while in Mumbai, it averages around 45 days. In Delhi, businesses commonly operate on a credit period of 60 days. Despite these varied credit period lengths, a consistent issue prevails concerning late payments, nationwide. This suggests that regardless of the offered credit period, challenges related to timely payments persist uniformly across all cities in India.

How aware are SMEs in tier-2 or tier-3 cities about Recordent’s services?

In metropolitan areas, particularly larger cities, there is a notable awareness among SMEs and MSMEs about our services, leading to a substantial client base. However, in tier-2 and tier-3 cities, although awareness exists, the density of businesses in these areas is comparatively lower. As a result, the number of clients from these regions is relatively modest. Our research highlights a direct correlation between awareness levels and the concentration of SMEs. Where there is a higher density of SMEs, awareness and client engagement tend to be higher. This underscores the importance of tailored outreach strategies that acknowledge and adapt to the unique business landscapes of each city tier. Ultimately, this approach ensures effective market penetration in regions characterized by varying business densities. Currently, we serve around 5,000 businesses from tier-2 and tier-3 cities.

Are you working on introducing any new feature?

Presently, Recordent’s focus lies in bolstering its current product offerings by augmenting and integrating new features. The existing structure encompasses four modules - Module 1 for credit checks, Module 2 for collections and invoice management, Module 3 for recovery, and Module 4 for analytics. The emphasis remains on refining and enhancing these modules rather than introducing entirely new service or features.

What can SMEs expect from the features - trade credit insurance, unlimited buyer dashboard?

In the domain of trade credit insurance, Recordent facilitates partnerships with third-party providers, serving as intermediaries to aid businesses in obtaining credit insurance. This assistance helps mitigate their credit exposure, offering a streamlined process for businesses seeking credit protection. Regarding the Unlimited Buyer Dashboard, our platform surpasses limitations related to the number of buyers a business can have.

Have you been able to overcome the teething problems faced during pandemic?

Entering the market presented the challenge of persuading businesses about the importance of digital solutions for effective collection management. Many companies heavily invest time in manual dues collection, which hampers their overall productivity. While Covid-19 accelerated the adoption of digital tools by numerous businesses, there is still a substantial journey ahead to completely embrace and optimise these solutions. Currently, Recordent is navigating this landscape, focusing on the ongoing challenge of fostering widespread understanding and adoption of digital tools to streamline collection processes. The goal is to continue promoting the value and efficiency gains of digital solutions in collection management, striving to encourage more businesses to fully embrace these technologies.