How connected ERPs and digital collection systems can boost SMEs

Every month, Ravindra, who runs a small manufacturing unit in Pune, watches his cash flow tighten, not because orders are lacking but because payments from buyers arrive weeks after invoices are raised. Reconciling what was paid, what is pending, and what is disputed often requires hours of manual checks across spreadsheets, bank statements, and multiple business apps. Ravindra’s experience reflects the reality of many MSMEs that are ambitious and capable but still spend valuable time navigating operational complexities.

The MSME (Micro, Small, and Medium Enterprises) sector is the powerhouse driving India’s economic engine, fuelling growth, innovation, and job creation across the nation. Contributing about 30% to the country’s GDP and providing livelihoods to over 28 crore people, according to PIB, it forms the backbone of India’s economy.

As MSMEs continue to scale their entrepreneurial efforts, they often work through process-related or operational challenges such as delayed receivables, fragmented reconciliation processes, limited data visibility across value chains, and navigating inadequate dispute resolution mechanisms. With more streamlined and transparent digital systems, business owners can devote greater bandwidth to growth, while a clearer digital trail can also open doors to easier and more efficient credit access.

Interestingly, data from the MSME Samadhaan Portal shows that as of October 2025, the total amount of disputed payments payable to MSMEs stood at ₹23,583 crore.

For entrepreneurs like Ravindra, maintaining a clear digital record of invoices and deliveries has become essential to avoid such disputes. This highlights the need for a system that functions as a unified business rail connecting enterprises.

Building a unified digital infrastructure for MSMEs

At the centre of addressing these challenges lies the need for an interoperable digital system. A system that simplifies processes and enables businesses to connect directly with each other, as well as with stakeholders such as banks, fintechs and business management platforms. Such a system ensures real-time visibility across participants, reducing friction in everyday transactions.

An integrated and interoperable framework enables buyers and suppliers to seamlessly present, collect, and reconcile payments within an open and trusted ecosystem. This becomes especially impactful when connected with their own Enterprise Resource Planning (ERP) systems or other business management systems that MSMEs already use to manage essential functions such as finance, supply chain, human resources, and manufacturing.

This allows MSMEs to be part of a connected ecosystem using their preferred accounting solutions. Information across solutions can be recorded and accessed in real time, ensuring end-to-end support for all B2B transactions in one place. It enables businesses to manage payments, invoicing, and reconciliation seamlessly, ensuring transparency and trust. By optimising workflows and reducing inefficiencies, it drives operational excellence while lowering costs, ensuring compliance, and opening doors to scalability and growth.

The road ahead

The benefits of such an interoperable ecosystem are tangible and far-reaching. For businesses, it means reduced operational friction and improved liquidity. For banks and fintechs, it ensures access to standardised data, enabling more accurate and efficient credit assessments. For policymakers, it provides deeper insights into economic flows, helping shape informed decisions.

As India’s economic backbone, MSMEs can leverage interoperable digital technologies to sustain their growth momentum. As more MSMEs adopt digital tools, they will not only strengthen their own businesses but also advance India’s Viksit Bharat vision forward.

Looking ahead, the journey toward a fully connected MSME ecosystem will require collaboration among policymakers, technology providers, and industry stakeholders. In doing so, India can create a digital-first environment where MSMEs thrive, unlocking new levels of efficiency, competitiveness, and resilience for the nation’s economy.

(Noopur Chaturvedi is the MD & CEO of NPCI Bharat BillPay Ltd.)