A CPG Credit and A/R Success Story

  • 75% Improvement in FTE Productivity
  • 95% Straight-Through Automation of Cash Application
  • 25% Reduction in DDO (Deduction Days Outstanding)
Cash Application Cloud
Collections Cloud
Deductions Cloud
Business Transformation Stories

We handle all the credit evaluation, cash application, collections, and deductions management within our shared services department in North America. Most of these operations were processed in-house and had a high manual intervention.

Jacob Whetstone
Director,
Credit & Accounts Receivable
Challenges
How did HighRadius help
Impact

Challenges

Danone with 1000+ customers has a diverse customer segment consisting of mom & pop stores as well as big-box retailers such as Wal-Mart. With a global presence and geographically distributed operations, Danone had shared services for its A/R present across multiple business units globally. Due to a decentralized system, the receivables landscape, at Danone, faced 3 core challenges- Increased process complexity with high volumes of short pays, high Manual processing of deductions, and poor visibility in the collections process.

Multiple payments and remittance formats and 100% manually processed Cash Application increased process complexity and number of short pays

Danone’s global presence coupled with a huge customer base resulted in multiple lockboxes spanning across different geographics and an increase in process complexity. They had multiple remittance and payment formats that were processed manually.

Their AR department largely dealt with payments coming in via ACH, Wire, and Checks with multiple remittance formats, ranging from EDI 820, emails and check images. Where EFT such as ACH & Wire comprised 65% of the total payment volume and contributed to 92% of the overall dollar value, paper-based payments such as checks occupied 35% of the payment value but only had an effect of 8% on the dollar value.

Danone had 24 different portals for remittance data aggregation since no remittance data for e-payments were provided by the bank.

The A/R team at Danone had to manually aggregate the remittance information from these portals, link them to the payments, and identify disputes. These de-coupled electronic remittances and payments were processed 100% manually increasing the process complexity further.

The A/R team spent 128 hours per week to process electronic payments and 140 hours per week to process check payments. Spending a large chunk of their time in identifying, matching, and processing cash, caused a delay in dispute identification further delaying the dispute resolution process and decreased customer satisfaction.

Manually identifying and processing deductions caused a delay in dispute management and increased DDO to 45+ days

Similar to cash application, the deductions management at Danone was a completely manual process. 85% of the overall disputes were a result of trade promotions deductions and required a 100% manual intervention.

With 90% of the deductions being valid, a huge manual effort was required to identify and process the 10% invalid deductions. Delay in deductions resolution due to lack of adoption of automation increased the Days Deductions Outstanding (DDO) to 45+ days.

With the A/R team spending a majority of their time in cash processing, dispute identification and resolution, the collections process at Danone took a hit. Danone had no automation in place for its collections process. The analysts dealt with more non-value-added activities including customer segregation, rather than focusing on at-risk accounts that required dunning.

A lack of visibility in the collections process prohibited them from focusing on more value-added tasks, such as updating the ERP system in a timely manner with the information needed for escalation or de-escalation on various accounts.

The delay in collections affected their cash flow and working capital. Apart from this, the collections team’s inability to identify the right customer to approach hindered their customer-client relationships.

ABOUT DANONE

Danone is a leading global food & beverage corporation with its headquarters based in Paris. Dedicated to bringing health through food to as many people as possible, the company is built on four businesses: Essential Dairy and Plant-Based Products, Waters, Early Life Nutrition, and Medical Nutrition.

INDUSTRY

CPG

REGION

North America and Canada

REVENUE

$30.3 Billion (2019)

PRODUCTS

  • Cash Application Cloud
  • Collections Cloud
  • Deductions Cloud
  • Claims & POD Automation

Jacob Whetstone

Initially when we would apply cash, we would have two screens: the first one would have the remittance data and the other would showcase the SAP-related data. But for a lot of these payments we had to undergo multiple different steps – not just look at the remittance, but also go to the portal and download documents, and it was all too time-consuming.

Jacob Whetstone
Director, Credit & Accounts Receivable
Danone

How did HighRadius Help

Out-of-box engines for parsing remittance from multiple formats delivered 90%+ cash application automation in under 90 days

Danone partnered with HighRadius to automate their A/R landscape and fast-track the collections process for increased customer satisfaction.

Danone was able to automatically process multiple remittance formats with features such as: Email Remittance Capture, Checks AI-OCR Capture, and Web Portal Remittance Capture. These features enabled the solution to capture remittance details through various formats, such as EDI files, OCR, check stubs, increasing its cash posting rate by 95% within 90 days of implementation. Email remittance capture & checks AI-OCR capture digitally captured and processed email and paper check remittances directly mapping them to the customer.

The web portal remittance capture gathered remittance details from the customer websites and processed these with no manual intervention.

Automated short-payment reason code identification during cash application increased the speed of deduction resolution & recovery

HighRadius’ Cash Application Cloud solution enabled the A/R team at Danone to automatically identify, match, and code deductions from customer deduction codes to Danone deduction codes. With no manual intervention, the solution also mapped multiple short pays to the customers directly.

Automated linking of claims, PODs, BOLs with the deduction case fast-tracked research, resolution, and recovery

The Deductions Cloud allowed Danone to aggregate data, such as collections claim from the retailer website and POD claims from the carrier website. It also extracted the deductions information from financial systems and matched them directly to the customer. The whole process from receiving the backups to closing the deductions(eg. Trade deductions) was automated. The automation solution is also able to break down the deductions at a pack-group level and match the data to the correct deals.

Centralized view of deduction resolution status helped follow-up with sales, distribution or customers for timely resolution

Danone was able to increase visibility in its deductions process with HighRadius automation in place. The deductions cloud provides visibility into the status of each deduction case and the progress of every dispute case in the pipeline. With increased visibility into the process and automatically resolved disputes, Danone’s A/R team was able to reside DDO by 25%.

Jacob Whetstone

We handle all the credit evaluation, cash application, collections, and deductions management within our shared services department in North America. Most of these operations were processed in-house and had a high manual intervention.

Jacob Whetstone
Director Credit & Accounts Receivable
Danone

Impact

No-Touch Cash Processing
Reduction in DDO
Increase in Cash Posting
Increase in Productivity

Autopilot for Order to Cash

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