MSME suppliers are paid on time, with every due date tracked from delivery

The AI tags your micro and small suppliers in SAP, works out each invoice's legal pay-by date from the day of delivery and tells payables what must go in this week's run.

Used day to day by
  • Payables team
  • Financial controllers
  • Tax team

How it runs with AI

The AI reads each supplier's Udyam certificate and tags the vendor in SAP as micro, small or medium. It works out every open invoice's pay-by date from the day of delivery, flags payment terms that run past the limit and tells payables on Teams which invoices must go in this week's run. Your payables lead approves every payment.

How it is done today

Payment terms in SAP are set once per vendor, often longer than the law allows for micro and small suppliers, and the list of which suppliers are micro or small enterprises sits in a spreadsheet updated once a year. Late payments surface at year end, when the tax auditor asks for the list.

Step by step

Where the work happens, what the AI does, and where it hands over to a person.

  1. Step 1, AI

    Reads each supplier's Udyam certificate and tags the vendor in SAP

    Needs to know: MSME categories

    In SAP S/4HANA

    Exception to step 1

    Emails the supplier for a current certificate when the one on file is missing

  2. Step 2, AI

    Checks each MSME vendor's payment terms against the legal limit

    Needs to know: Legal payment limits, Written terms by vendor

    In SAP S/4HANA

  3. Step 3, AI

    Works out every open invoice's pay-by date from the day of delivery

    Needs to know: Legal payment limits, Recorded objection dates

    In SAP S/4HANA

    Exception to step 3

    Restarts the count from the day the supplier fixes a problem your team raised in writing

  4. Step 4, AI

    Tells the payables lead which invoices must go in this week's run

    Needs to know: Payment run calendar

    In Microsoft Teams

    Exception to step 4

    Alerts the financial controller if an invoice is still unpaid 2 days before its limit

  5. Step 5, Person

    Approves the payment run, with every MSME invoice in it on time

    In SAP S/4HANA

What stays with a person

  • Approves the payment run, with every MSME invoice in it on time

How the pay-by date is worked out

The AI counts each invoice from the day of delivery and applies the payment limit the law sets for micro and small suppliers, or the written terms when they are shorter. When your team raises a problem with the goods in writing, the count restarts from the day the supplier fixes it. Medium enterprises are tagged too, and fall outside the limit. Your tax team confirms the rules the check applies and updates them when the law changes.

Apps in this example

  • SAP S/4HANA
  • Microsoft Teams

The same flow works with the apps you use.

This fits you if

  • You buy from more than 50 micro or small enterprises across plants or entities
  • Payment terms in SAP are set per vendor, often longer than the MSME limit
  • Your MSME supplier list lives in a spreadsheet updated once a year
  • Your tax auditor asks each year for the MSME dues paid after the limit

What to watch for

  • Paying suppliers stays with your payables team. The AI lists what must be paid and by when, and your team releases each payment
  • Changing a vendor's payment terms goes through procurement's approval. The AI proposes the change with the reason
  • The count restarts from a later date only when your team raised a problem with the goods in writing in time. The AI uses the objection dates your team records in SAP
  • Your tax team decides how to treat suppliers registered on Udyam as traders. The AI tags them for that decision
  • A supplier's classification can change from year to year. The AI asks each MSME supplier for its current certificate every April

Read more

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