Everything Corporates Need to Know About TReDS Onboarding Before March 31, 2025
India’s business landscape is evolving rapidly, with MSMEs playing a critical role in sustaining growth. To ensure uninterrupted cash flow, the Reserve Bank of India (RBI) has mandated that all corporates register on a Trade Receivable Discounting System (TReDS) platform by March 31, 2025. This move not only supports MSMEs but also helps corporates strengthen their cash flow management and streamline trade payables.
What is TReDS and Why should Corporates Care
TReDS, a digital platform simplifies the financing of trade receivables for MSMEs. It enables them to sell their invoices to banks and financial institutions at competitive rates. This ensures that MSMEs receive timely payments, while financiers make a profit on their investment in a short time, and corporates benefit from automated, and transparent systems for managing their outstanding payables.
With the March 31, 2025 deadline fast approaching, corporates must act now to avoid last-minute roadblocks.
Guide For Corporates On TReDS Onboarding
Step 1: Choose An Approved TReDS Platform
RBI has authorised few TReDS platforms for corporate participation. One of them is DTX by KredX, which offers a simple, fast, and user-friendly interface. Learn more about DTX and explore how it simplifies TReDS onboarding for corporates.
Step 2: Register On The TReDS Portal
On a TReDS portal like DTX, corporate buyers have to provide basic business details, including:
- Legal entity name and registration details
- PAN and GST identification numbers
- Official contact details
- Bank account information
Step 3: Submit Documentation
After giving all the necessary details, corporates need to upload the following:
- Certificate of Incorporation
- Board resolution authorising participation in TReDS
- KYC details of authorised personnel
- Recent financial statements
Step 4: Verification And Approval
After document submission, they are reviewed and go for compliance checks. Once these documents are verified, registration on the TReDS portal is approved. This process typically takes a few business days, depending on the submitted documents.
Step 5: Start Approving MSME Invoices
Once onboarded, corporates have to approve invoices submitted by their MSME sellers, allowing banks, NBFCs and financiers to finance them as per their needs.
Key Benefits of TReDS for Corporates and Financiers
Onboarding onto a TReDS platform is more than regulatory compliance, as it signifies a strategic advantage. For those wondering what is TReDS, it’s a digital system that connects buyers, MSMEs, and financiers to streamline invoice financing. It creates a win-win situation for all stakeholders by enabling faster payments, better cash flow visibility, and enhanced financial stability across the supply chain.
For MSMEs
- Access to funds: Sellers get immediate working capital by selling their invoices.
- Lower financial burden: No collateral or additional debt, as factoring is based on unpaid invoices.
- Regulatory protection: TReDS platforms operate under RBI guidelines, ensuring security, transparency, and fair practices.
- Faster approvals: Digital processes reduce paperwork and speed up financing.
For Corporates:
- Better relationships: Timely payments result in better trust and working relationships with MSME sellers.
- Optimised cash flow: Invoice discounting enables better working capital management, reducing the burden of short-term liabilities.
- Cost savings: MSMEs offer competitive pricing on improved liquidity, leading to cost efficiencies for corporate buyers.
- Operational efficiency: The digital platform reduces administrative workload and streamlines payment cycles.
For Financiers:
- Get good leads: TReDS gives financiers a steady flow of low-risk and verified invoices from creditworthy corporate buyers.
- Investment opportunities: Financiers earn competitive returns by financing MSME invoices at discounted rates.
- Portfolio diversification: Getting a wide range of MSME receivables reduces risk concentration and enhances financial stability.
- Transparent transactions: Being a digital platform, TReDS ensures transparency, reducing credit and operational risks for financiers.
Through TReDS, corporates can strengthen their supply chains, while financiers gain access to secure, high-yield investment opportunities, creating a win-win ecosystem for all stakeholders.
Overcoming Common Challenges In TReDS Onboarding
The TReDS onboarding process is designed to be quick and straightforward, but corporates often face a few challenges:
1. Internal Resistance to Change: Some teams see TReDS as an extra compliance task. Educate decision-makers on its long-term financial benefits.
2. Documentation Errors: Missing or outdated documents can delay approval. Keep all KYC, financial, and authorisation documents updated before submission.
Why you should Onboard Now
Complete Your TReDS Registration Before March 31, 2025! Get your business onboarded on DTX, an RBI-licensed TReDS platform, and experience faster payments, improved working capital, and seamless digital transactions.Leaving it for the last moment could potentially create unnecessary hurdles, including:
- Regulatory non-compliance risks are offences which could lead to fines/ penalties.
- Last-minute delays, as many corporates will rush to onboard just before the deadline ends.
- Don’t miss to optimise cash flow, as TReDS opens up an efficient way to manage trade receivables.
Prepare Your Business For the Future with TReDS
TReDS is much more than a compliance requirement, it’s a platform that amplifies financial efficiency, strengthens sellers relationships, and streamlines cash flow. By registering on TReDS portal, corporates can highlight themselves as thought-leaders and reliable business partners while getting operational efficiency on the platform. Prepare your business for the future and embrace digital invoice financing today.
Are you ready to get onboarded on DTX (RBI-licensed TReDS portal), initiate registration, and give your business the ease of seamless financial transactions.
