Danone Recovers $6 Million By Extending Shared Service Operations with a Cash Application Solution

98% (hit rate) payments applied by the system automatically
75% of FTEs reallocated to other tasks
$6 M recovered for Canada within 6 months of implementation
25 days reduction in DDO with faster deduction resolution
Smooth ERP integration with the existing system

Cash Application

Claims & POD Automation

Collections

Business Transformation Stories

We were able to redeploy some of those employees to focus on collecting back invalid deductions. So actually, after about five months of going live, we were able to click close to $6 million back in value.

Jacob Whetstone
Director, Credit & Accounts Receivable
Danone

Challenges

How did HighRadius help

Impact

Complications in Expanding Shared Service Operations to Canada

With Danone being a global entity, its Accounts Receivable (A/R) operations extended overseas across four significant businesses- Essential Dairy and Plant-Based Products, Early Life Nutrition, Medical Nutrition, and Waters. The business units are spread across the United States and Canada, and they all follow different processes, systems, tools, and KPIs.Danone decided to set up a shared service center for its BUs in the United States.

Danone first brought in their Water business line within shared services. It was a much smaller business, and it was thus a lot easier for them to just integrate with a lot of similar processes in place. Bringing in their Diary business next made them realize that there were slight differences as the product differed. However, overall being a smaller business, they could work out the kinks and replicate the same across their businesses.

Just when Danone felt the challenges reduce and gain confidence in their plug-and-play model, the decision to bring Canada in turned things around. They thought it would be easy to service units there with the same products sold, but there were many differences. So how it went to market, how they operated with the stores, and even the French language, which meant sending out correspondences in both languages, English and French, were just a few of many challenges that started appearing.

Challenges with Cash Application at Danone

Manual Remittance Capture Across Various Sources:
The analysts spent most of their time extracting remittances from emails, EDIs, 25+ A/P portals, which hampered their efficiency and led to inaccuracies.

Lack of Time and Resources to Identify and Collect on Invalid Deductions with 100% Manual Cash Application:
85% of the overall disputes resulted from trade promotion deductions and required 100% manual intervention. With increasing payments, more and more resources were needed to apply cash, thus leaving no time to process deductions.

ABOUT DANONE

Danone, a prominent global food-product provider, serves a wide range of customers through more than 1000 food wholesalers, including Walmart and Amazon. Danone works with the mission of “bringing health through food to as many people as possible.” Danone has Shared Services for its Accounts Receivable (A/R) across its numerous businesses spread across the globe.

INDUSTRY

Consumer Goods

HEADQUARTERS

Paris, France

REVENUE

€3.3 Billion (2020)

PRODUCTS

Cash Application
Collections
Claims and POD Automation

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 environment. 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

Increasing Efficiency of Shared Services with Cloud Automation

Danone partnered with HighRadius to standardize its global Order-to-Cash (O2C) processes while also leveraging automation to enable greater operational efficiency, which led them to close about $6 million back in value.

Auto-Aggregation of Remittance Data:

The Cash Application cloud solution helped the analysts by automatically extracting remittance information from email bodies, attachments, password-protected files, EDIs as well as all A/P portals.

Automated Invoice Matching and Deduction and Discount Coding:

The Cash Application Cloud solution allowed for real-time payments with no lag, thus increasing the cash posting rate for Danone by 95% within 90 days of implementation.

The solution also enabled auto-linking of invoices with the payment while also identifying the short payments allowing the 6 FTEs to focus on other critical tasks like collecting back on invalid deductions and focussing on better customer experience by sending out invalid letters in the preferred local language.