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Danone Recovers $6 Million from Invalid Deductions Within
5 Months of A/R Automation Implementation by Reallocating 75% of Cash Application Employees to Collections

  • $6Million working capital recovered as 75% FTEs focused on collecting back invalid deductions
  • 98% automated cash application
  • 25 days reduction in DDO with faster deduction resolution
  • 95% improvement in auto-cash posting rate within 90 days of implementation
Cash Application
Deductions
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

Challenges in Cash Application

  • Lack of Time and Resources to Identify and Collect on Invalid Deductions with 100% Manual
    Cash Application:

    65% of Danone’s payment landscape was dominated by e-payments, while the rest 35% consisted of check payments. The analyst spent most of their time extracting the remittances from emails, EDIs, and web portals for e-payments and manually post check payments.
  • Manual Remittance Capture from 25+ Customer Portals
    Danone dealt with multiple big box retailers such as Amazon, Walmart. These large customers uploaded their remittance information on web portals. Their cash application analysts had to log in with 25+ customer portals for aggregating remittance data, which hampered their efficiency and led to inaccuracies.
  • Manual Mapping of Customer Reason Codes to ERP-Specific Reason Codes
    Every year, Danone received 4000+ deductions that had customer-specific reason codes. For every deduction, the deductions team had to manually map the customer reason code to their ERP-specific reason code. This resulted in a slower dispute resolution process.

Challenges in Deductions

  • High Write Offs due to Lack of Time and Resources to Identify Invalid Deductions and Recover Them
    Danone encountered a high volume of deductions from big box retailers and small businesses every year. The deduction landscape was dominated by trade deductions, and the slow deduction resolution led to higher bad debt. They ended up writing off trade deductions that were under $250 without proper research.

Complexities in Expanding the Shared Services to Canada Due to Local Language Requirements(French)

Being a global provider of food and dairy products, Danone has multiple business units across US and Canada regions. Across these business units, the O2C operations were siloed and non-standardized. Danone first brought in their Water business line within shared services. However, when they introduced Danone Canada, it exposed some major loopholes in the receivables process.

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 Packaged Goods (CPG)

HEADQUARTERS

Paris, France

REVENUE

$26 Billion (2020)

PRODUCTS

Cash Application
Collections
Claims and POD Automation
Deduction Cloud

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 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

How did Highradius Help

Danone was Able to Recover $6M from Invalid Deductions, by Reallocating 75% A/R Analysts to Collections:

By automating manual processes like cash application and dispute resolution, Danone was able to free up 6 full-time resources out of a 8 member team and reallocated them to critical tasks.

Enabling 98% Automated Cash Application:

Highradius cash Application Software automatically matched incoming payments to the open invoices, resulting in 98% hit rates for cash application.

Automating Remittance Capture Across Emails, Check-Stubs, Web Portals:

Cash Application Software helped the analysts automatically extract remittance information from emails, EDIs and 25+ customer web portals.

Enabling Automated Deduction Coding:

With Cash Application Software, the cash application analysts could automatically map the customer reason codes to their ERP-specific reason codes without any manual intervention.

Recovering $6 Million Within 5 Months of Cash Application Solution Implementation

(hit rate) payments applied by the system automatically
of FTEs reallocated to
other tasks
recovered for Canada within 6 Months of bringing it within Danone shared services
reduction in Days Deduction Outstanding(DDO) with faster deduction resolution

Autopilot for Order to Cash

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