16 Min Read
Growth Story Shadowed by Cash Stress
India’s mid-market is vast, contributing nearly 30% of GDP, 45% of exports, and employing more than 26 crore people across multiple sectors. With the economy expected to grow 6.5% in FY25, Micro, Small and Medium Enterprises (MSMEs) are scaling rapidly, from higher capacity use in factories to double-digit expansion in healthcare and Fast-Moving Consumer Goods (FMCG).
Yet liquidity tells a different story. Dun & Bradstreet reports that the net working-capital cycle has stretched from 93 days in FY23 to 103 days in FY24. CRISIL warns that one in five MSMEs now experiences liquidity stress compared to pre-pandemic benchmarks.
The growth outlook is robust. The mid-market enterprises’ reach spans industrial hubs, second-tier cities, and rural clusters. Sectors where mid-market firms dominate are all scaling:
- Manufacturing capacity utilisation hovers around 75–77%, leaving headroom for growth.
- Healthcare is projected to expand from 32 lakh crore in 2022 to 54 lakh crore by 2026.
- Logistics has gained efficiency: India ranks 38th globally in the 2023 World Bank Logistics Performance Index (LPI), reflecting infrastructure upgrades.
- FMCG continues to outpace GDP, with the market expected to reach 53 lakh crore by 2027.
The divergence, where demand is strong but cash is weak, is not a temporary imbalance. It is structural. PwC notes that private-credit funds in India are expanding rapidly, offering greater flexibility in structuring deals. Visa’s 2024 Working Capital Index shows that top performers shortened their cash-conversion cycles by 51%, stressing the need for robust operations.
For lenders and investors, the paradox is stark: companies boast full order books, yet liquidity remains tight when receivables drag. For COOs, it is a signal to act. Visibility has become central to a company’s financial credibility and a key element to unlock capital for growth.
Where Cash Stalls
The question, then, is where visibility breaks down.
For COOs, the challenge is clear: liquidity pressure stems less from weak demand and more from process opacity.
Unless approvals, deliveries, and claims are visible and auditable, cash will remain locked, regardless of the sector.
The problem is structural. Mid-market firms run on multiple systems. Core transactions sit on ERPs. Finance is handled on separate accounting platforms. Orders are routed through vendor and distributor applications. The systems rarely talk to each other, and integration is largely manual. Data extraction, normalisation, transformation, and visualisation are consequently time-consuming.
By the time dashboards, if any, reach the COO, the data is already stale. Finance reports longer debtor days and rising inventory cycles. External lenders read these delays as signs of execution risk.
This pattern is visible across sectors. In manufacturing, procurement approvals stall, and vendors hold back shipments. In healthcare, discharge records and attachments are incomplete, so insurers defer settlements. In FMCG, missing proof-of-delivery (POD) slows invoice acceptance. In logistics, multi-subsidiary reports are consolidated too late, hiding cash shortfalls until they are material.
The gap is not marginal. Dun & Bradstreet found that debtor days for MSMEs have increased by 3–4 days on average, while inventory holding has risen by five days over the past year. That translates into weeks of additional cash locked in receivables and stock.
Banks notice. Visa’s 2024 Working Capital Index found that corporates in the bottom quartile of visibility had conversion cycles nearly twice as long as top performers, and their borrowing costs were consistently higher.
Liquidity Strain in Manufacturing Operations
Manufacturing is central to India’s mid-market, but it is also where operational opacity creates the greatest strain. Procurement cycles, supplier onboarding, and quality clearance are three recurring choke points that directly affect cash flow. Let us look at a procurement cycle use case.
Procurement Delays Block Flow
A global beverage producer averaged nine days from purchase request (PR) to purchase order (PO). Approvals sat in inboxes. Buyers chased signatures. Vendors withheld dispatches until POs were confirmed.
The COO introduced daily SAP exports. Data normalisation and transformation were automated using AI, creating dashboards that showed turnaround by approver and flagged aged requests.
Cycle times dropped from nine days to three. 95% of routine POs cleared within SLA. Vendors shipped on time. Rush orders fell. Discounts were claimed consistently. Working-capital strain eased through faster internal flow.
Contrast: In firms without visibility, PR-to-PO cycles stretch to weeks. Suppliers impose stricter terms or demand advances. Discounts are lost. Inventory buffers rise. Each symptom translates into higher working-capital needs.
Process Visibility Key to Healthcare Cash
Healthcare is one of India’s fastest-growing sectors, but it is also where operational choke points directly impact cash flow. Insurance-linked revenue accounts for an increasing share of hospital income, which means any delay in documentation, approvals, or claims translates into delayed liquidity.
Here’s a pre-authorisation use case.
Pre-Authorisation Obstacles
For planned procedures, insurers require pre-authorisation before treatment begins. One multi-specialty hospital managed this through emails and phone calls. No dashboard tracked pending requests. Approvals that should have taken 12 hours often dragged on for 48.
Operating theatres stood idle. Doctors adjusted schedules. Bed occupancy dipped. Finance teams lost billing days, as revenue recognition was delayed until claims were initiated.
An AI-powered dashboard showing pre-authorisation turnaround time by insurer and by department cut the average cycle to 14 hours. Surgical throughput rose. Bed utilisation improved.
Contrast: Without visibility, management blamed “clinical scheduling” when the real bottleneck was administrative. Becker’s has flagged prior authorisation delays as a leading driver of lost revenue days.
FMCG Visibility Gaps Tie Up Cash
FMCG companies face some of the tightest working-capital pressures. Margins are thin, sales volumes are high, and delays at any point in the order-to-cash cycle can tie up crores in receivables. The sector illustrates how visibility gaps at the last mile translate directly into financial strain.
Let’s look at the financial impact caused by POD delays.
Forward Invoicing: Pod Delays
A regional FMCG player faced recurring invoice rejections from distributors. Proof-of-delivery (POD) was often delayed or missing. Sales staff used mobile messages, delivery agents logged data in separate apps, and distributors maintained their own portals. Without confirmation, invoices could not be issued.
The company began exporting delivery confirmations daily. AI-based automation normalised formats and transformed them into a dashboard. The dashboard highlighted which deliveries lacked POD and how long invoices had been pending. With visibility restored, the COO enforced a 24-hour SLA for POD submission.
Within a quarter, invoice rejections dropped. Receivables accelerated. Promotions were billed within their valid window, lifting secondary sales.
Contrast: Without POD visibility, invoices are rejected, receivables balloon, and distributors hold on to cash longer.
Logistics Execution Blockages Hit Liquidity
Logistics firms are critical to India’s supply chain but face some of the most acute visibility gaps. Shipments cross states, ports, and subsidiaries. When data is fragmented, cash gets locked at multiple points in the order-to-cash cycle.
A mid-market logistics business managing data from multiple subsidiaries is the perfect example. Let’s look at the use case.
Multi-Entity Consolidation
A logistics company operating five subsidiaries consolidated data manually. Each unit maintained separate ERPs and billing records. Group reports took two weeks to prepare. By then, liquidity gaps were invisible.
Automation powered by AI changed the cadence. Normalisation and transformation of shipment logs, PODs, and invoices ran daily. A single dashboard highlighted missing documents, intercompany gaps, and consolidated cash positions.
With early visibility, the COO flagged a looming shortfall two months ahead. Finance renegotiated credit terms before the issue became critical.
Contrast: Without consolidation, shortfalls only surface when cash is already strained. Borrowing is rushed, terms are punitive, and lenders treat the firm as high risk. Dryrun’s treasury research confirms that earlier detection of shortfalls in logistics materially reduces financing costs.
Visibility as a Credit Signal
Banks and investors go beyond financial statements, relying on operational metrics as evidence of discipline. Delays in order processing, fulfilment, or supplier payments are interpreted as execution failure.
Lender Perspective
Senior credit officers across lending institutions commonly voice their opinion in the following manner:
“Delayed documentation is a bigger risk flag than a dip in sales. A weak quarter can be explained. But if processes are consistently slow, that signals structural execution risk.”
This is consistent with the findings of Visa’s 2024 Working Capital Index, which showed that corporates in the top quartile shortened cash-conversion cycles by 51%, unlocking multi-million-dollar benefits. Bottom-quartile firms, by contrast, faced longer cycles, higher borrowing costs, and weaker investor confidence.
COO’s Role in Credibility
For COOs, this reframes their role. Metrics like purchase-request approval turnaround, discharge-to-claim times, or POD cycle lags are not “back-office KPIs.” They are financial credibility markers. Publishing them shifts the narrative from anecdotal explanations to auditable evidence of control.
This shortens approval cycles for loans, strengthens the case for larger credit lines, and reassures investors that growth is supported by execution discipline.
Visibility, in this sense, is a currency.
Every day saved in an approval loop or POD confirmation strengthens operational performance and signals reliability to lenders and unlocks capital for growth.
Automating What Matters
Data extraction can, in theory, be automated with advanced integrations. Large enterprises invest in middleware, APIs, and robotic process automation to connect ERPs, vendor portals, and accounting systems. But for most mid-market firms, the expense outweighs the benefit. Integrations are costly to build, complex to maintain, and require ongoing IT support.
A leaner model for mid-market COOs is to keep the extraction step manual, typically one to three hours a day, depending on the number of systems and data channels. Instead, automate the stages that truly consume time: normalisation, transformation, and visualisation.
Normalisation
Manual process: Analysts spend days cleaning and aligning fields. Different systems use different taxonomies. One ERP records “supplier,” another “vendor,” while spreadsheets use free text.
Automation: Scripts and templates standardise field names and reconcile master data instantly. A task that took up to a week is cut to minutes.
Transformation
Manual process: Analysts manually tag purchase requests, approvals, PODs, and claim statuses. Metrics such as turnaround time and pending delivery confirmations are compiled manually, making them error-prone.
Automation: At-based rules engines compute these metrics automatically. Approval delays or SLA breaches are flagged in real time. Transformation becomes continuous instead of episodic.
Visualisation
Manual process: Once data is cleaned, charts and dashboards are built. Each refresh takes a day. As the normalisation and transformation already delay the process, by the time the COO sees the report, it is already outdated.
Automation: Dashboards refresh daily, drawing from the already normalised and transformed dataset, driven by AI. KPIs are presented in consistent formats.
Why This Matters
The difference is stark. Without automation, firms run on week-old data. CFOs and COOs debate problems after the fact. With automation, they operate on daily data, flagging bottlenecks as they emerge.
It is about targeted automation that addresses the three costliest layers. Firms achieve the benefits of real-time visibility at a fraction of the cost.
For mid-market COOs, this is the practical balance. Manual extraction remains manageable. Automating the rest unlocks timely visibility without the overhead of enterprise-grade integration projects.
The Six-Step COO Playbook
A structured approach can convert operational opacity into measurable liquidity gains. For mid-market firms, the key is not to overhaul entire systems but to target choke points systematically.
Step 1: Identify choke points
Map the key process stages where cash is most frequently blocked. For example:
- Manufacturing: PR-to-PO approvals.
- Healthcare: discharge-to-claim packet completion.
- FMCG: dispatch-to-POD.
- Logistics: shipment-to-invoice.
Step 2: Establish baselines
Establish baselines. Use a week’s data extracts to measure cycle times for core processes such as approvals, dispatch-to-POD, or claim completion. Note which departments or stages show consistent delays. This creates a fact base to identify where cash gets held up.
Step 3: Define SLAs
Set clear turnaround targets such as approvals within 72 hours, POD confirmation within 24 hours, or claims filed at discharge. SLAs must be explicit and measurable.
Step 4: Automate reporting
Utilize an AI-based prompt-to-dashboard tool such as Excellenc3 to automate normalisation, transformation, and dashboard refresh. Daily dashboards replace week-old reports. Dashboards should remain focused on KPIs such as average cycle time, pending cases by stage, and SLA breaches.
Step 5: Run a sprint
For two weeks, use custom dashboards to target the worst bottlenecks daily. The goal is to prove the impact of operations on capital efficiency.
Step 6: Measure impact
Quantify the results. Measure days saved, invoices accelerated, or claims resolved. Present evidence to CFOs.
Why the Playbook Works
Each step is simple. None requires a BI team. Each is measurable. The discipline comes from repetition, including identifying bottlenecks, surfacing them daily, and proving gains.
Banks and investors respond to evidence. A COO who demonstrates faster approval cycles, quicker dispatch-to-POD closure, and timely claim settlements signals execution discipline. That discipline builds external confidence and strengthens the firm’s creditworthiness.
Governance and Credibility
Dashboards alone do not build trust. Governance turns numbers into credibility. For COOs, this means embedding accountability, escalation routines, and audit trails into the way operational data is managed.
Assign Process Owners
Every choke point must have an owner. When ownership is clear, bottlenecks stop being “system issues” and start being solvable.
Run Daily Stand-Ups
Dashboards must feed into routines. A 15-minute daily review of stalled cases ensures action. Items breaching SLA are flagged. Escalations are triggered automatically.
Maintain Audit Logs
Every approval, delay, and escalation should be logged. Audit logs allow COOs to show not just results but the governance discipline behind them.
Why Governance Matters To Finance
Lenders and investors look for predictability. They assess finance reports, but the reliability of those numbers depends on operational discipline. COOs who enforce audit trails on approvals, dispatches, and claims create the evidence base that reassures capital providers.
Opportunity in India’s Credit Landscape
The private-debt sector is still a relatively emerging asset class in India, but it has witnessed encouraging growth over the past 10 years at a CAGR of 23%. This surge is filling gaps left by traditional bank lending. In such an environment, firms able to produce auditable operational metrics have a decisive edge.
COOs who embed governance into dashboards do more than shorten cycle times. They create traceable evidence of process discipline that enhances credibility, making their firms more attractive to a growing pool of non-bank lenders.
From Efficiency to Finance
Across sectors, operational visibility goes beyond internal efficiency. Shortening approval loops, POD confirmations, or claim submissions releases cash faster, reduces working-capital volatility, and strengthens credibility with lenders.
Here are some examples.
Healthcare: Faster Claims, Faster Cash
Hospitals that cut discharge-to-claim cycles from three days to same-day filing reduce settlement lags by a week or more. That means earlier insurer payouts and fewer receivables sitting idle. Becker’s reported that claim denials drained $1.2 billion from U.S. hospitals in 2023. For Indian hospitals, the same mechanics apply.
Manufacturing: Procurement Discipline Stabilises Cash Flow
Manufacturers who shorten PR-to-PO cycles from nine to three days gain more predictable supplier payments. Vendors dispatch on time, reducing the need for costly rush orders. Discounts are claimed reliably. CFOs report steadier working-capital positions instead of spikes and troughs.
Consumer Goods: POD Clarity Unlocks Receivables
FMCG firms that enforce a 24-hour SLA for POD submission see invoice acceptance rates rise sharply. Promotions are billed within valid windows, ensuring revenue is captured fully.
Logistics: Early Warnings Strengthen Liquidity Planning
Logistics companies that consolidate subsidiary data daily detect shortfalls weeks earlier. That lead time allows CFOs to renegotiate terms or secure facilities proactively, rather than under duress.
The Broader Signal
Across sectors, the financial outcome is clear: visibility stabilises cash, reduces volatility, and creates evidence of operational control. Banks treat rising debtor days as a red flag. Instead, when COOs present daily metrics and SLA adherence, the story shifts from weakness to discipline. That shift can decide the price of capital.
Making Visibility Sustainable
The six-step playbook proves that COOs can close visibility gaps with discipline, lightweight automation, and clear SLAs. Playbooks require effort. Teams need to extract data daily, configure scripts, build dashboards, and enforce routines. For many mid-market firms, the challenge is not knowing what to do — it is sustaining the cadence long enough to see results.
That is where purpose-built solutions help. They compress the learning curve and eliminate the manual overhead. Instead of asking teams to build their own automation, a product can deliver ready-to-use visibility within days.
Why Mid-Market Firms Hesitate
Common barriers recur:
- Time: Managers are already stretched. Extracting data and building dashboards feels like another project.
- Skills: Few firms have BI specialists. Analysts juggle operations and reporting, leading to inconsistent output.
- Cost: Full-scale integration projects are expensive. ERP customisations or middleware demand budgets mid-market firms rarely have.
As a result, visibility projects often stall. COOs recognise the need but postpone action. Yet, liquidity pressure mounts.
What Excellenc3 Offers
Excellenc3’s prompt-to-dashboard offering is built for this exact context. It ingests extracts from ERP, accounting, distributor, and insurer systems. Data extraction can also be automated by the client’s IT team or included as part of an extended implementation. Excellenc3 provides this option at an additional budget. The core value lies in automating everything after extraction: normalisation, transformation, and visualisation, all triggered through a simple prompt.
- Normalisation: Fields from different systems are standardised instantly.
- Transformation: Metrics such as approval turnaround, POD confirmation lag, and claim cycle times are calculated automatically.
- Visualisation: Dashboards refresh daily, showing pending items by stage and SLA breaches.
Audit logs are generated for every action. That means every approval, delay, or escalation is traceable. For CFOs and lenders, this traceability is as valuable as the metrics are to the COOs.
Modular Rollout
Excellenc3 can be deployed incrementally rather than through a full-scale implementation. Firms can begin with a single process area, such as procurement in manufacturing, claims in healthcare, or POD in FMCG and logistics. Each module can be configured within days, with benefits visible soon after go-live.
Why It Matters To Finance
For COOs, Excellenc3 provides daily visibility of choke points. For CFOs, it provides evidence of control. For lenders, it reduces uncertainty. Together, it converts operational discipline into financial credibility.
Advisory Transition
The point is not that every firm must buy a product. Some may prefer to run the playbook manually. But for COOs who want speed, consistency, and lender-ready credibility, Excellenc3 shortens the journey. It turns best-practice playbooks into daily routines, without the drag of manual reporting.
A Pilot Worth Running
The strongest way to prove visibility works is not theory, but practice. For COOs, the question is not “should we?” but “how quickly can we test this without disrupting operations?” The answer lies in running a pilot.
Closing the Gap
India’s mid-market firms struggle less with generating demand than with maintaining visibility. Delayed approvals, incomplete claims, and missing PODs translate directly into cash lost. As these delays accumulate, cycles stretch and creditworthiness erodes.
COOs hold the levers. By running even a 30-day pilot, they can prove that process visibility restores liquidity.
Next Steps for COOs
Excellenc3 is designed to make this pilot simple. Setup takes days. Results appear within weeks. Each module builds toward a comprehensive COO dashboard, supported by audit logs that lenders trust.
Run a pilot. Prove the impact. Book a demo with Excellenc3 today.
